10KSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

        For the transition period from _________ to _________

Commission file number 000-26119

CHINA WORLD TRADE CORPORATION

(Exact name of small business issuer as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization) 87-0629754 (IRS Employer Identification No.)

3rd Floor, Goldlion Digital Network Center

138 Tiyu Road East, Tianhe

Guangzhou, PRC

(Address of principal executive offices)

(001-8620) -2886-0608

(Issuer's telephone number)

(Former name, address and fiscal year, if changed since last report)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $.001 per share

(Title of Class)

Check whether the issuer: (1) filed all reports required to be filed by Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Issuer's revenues for its most recent fiscal year were $4,339,337

The aggregate market value of the issuer's common stock held by non-affiliates was approximately $9.24 million, based on the average closing bid and ask price for the common stock on January 31, 2007.

As of January 31, 2007, there were outstanding 43,865,923 shares of the issuer's common stock, par value $.001.

Transitional Small Business Disclosure Format (check one): Yes o No x

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

The discussion contained in this 10-KSB under the Securities Exchange Act of 1934, as amended, (the "Exchange Act") contains forward-looking statements that involve risks and uncertainties. The issuer's actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the Company believes," "management believes" and similar language, including those set forth in the discussion under "Description of Business," including the "Risk Factors" described in that section, and "Management's Discussion and Analysis or Plan of Operation" as well as those discussed elsewhere in this Form 10-KSB. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. Statements contained in this Form 10-KSB that are not historical facts are forward-looking statements that are subject to the "safe harbor" created by the Private Securities Litigation Reform Act of 1995.

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	TABLE OF CONTENTS
	Part I
Item		Page
1.	Description of Business	4
2.	Description of Property	25
3.	Legal Proceedings	25
4.	Submission of Matters to a Vote of Security Holders	26
	Part II
5.	Market for Common Equity and Related Stockholder Matters	26
6.	Management's Discussion and Analysis or Plan of Operation	29
7.	Financial Statements	38
8.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	74
8A.	Disclosure Controls and Procedures	75
	Part III
9.	Directors and Executive Officers of the Registrant	77
10.	Executive Compensation	79
11.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	81
12.	Certain Relationships and Related Transactions	82
13.	Exhibits, Lists and Reports on Form 8-K	83
14.	Principal Accountant Fees and Services	84
	Other
	Index to Exhibits	85
	Signature Page	86

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PART I

Item 1. Description of Business

History Of Our Company

We were incorporated in the State of Nevada on January 29, 1998 under the name Txon International Development Corporation to conduct any lawful business, to exercise any lawful purpose and power, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Laws of Nevada.

On August 14, 2000, pursuant to a share exchange agreement dated August 10, 2000, by and among Main Edge International Limited, a British Virgin Islands corporation, Virtual Edge Limited, a British Virgin Islands corporation and a wholly-owned subsidiary of Main Edge, Richard Ford, Jeanie Hildebrand and Gary Lewis, we acquired from Main Edge all of the shares of Virtual Edge (the “Acquisition”) in exchange for an aggregate of 1,961,175 shares of our common stock, which shares equaled 75.16% of Txon International’s issued and outstanding shares after giving effect to the Acquisition. Both Main Edge and Virtual Edge were a non-operating holding companies organized to own the stock of businesses which they acquired. On September 15, 2000, Txon International Development Corporation changed its name to China World Trade Corporation (China World Trade or CWTD) and effectuated an 8 for 1 forward stock split. As a result of the forward stock split, Main Edge held 15,689,400 shares of our common stock, which shares equaled 75.16% of our issued and outstanding shares.

In September 2002, we underwent a debt for equity capital restructuring whereby certain creditors of China World Trade converted an aggregate of $2,731,677 into an aggregate of 4,000,000 shares of common stock.

On September 3, 2002, Powertronic Holdings Limited (“Powertronic”), a British Virgin Islands company, entered into a share purchase agreement with us (the “First Share Purchase Agreement”), to purchase 1,000,000 shares of our common stock and warrants to purchase up to 2,000,000 shares of our common stock (such warrants, the “First Warrants”), for the total purchase price of $500,000. Additionally, on December 17, 2002, Powertronic entered into a second share purchase agreement (the “Second Share Purchase Agreement”) with us , to purchase an additional 1,000,000 shares of our common stock and warrants to purchase up to an additional 2,000,000 shares of our common stock (such warrants, the “Second Warrants”), for the total purchase price of $500,000. The First Warrants and the Second Warrants had an exercise price of $0.575 per share and were exercised in 2004.

On December 17, 2002, we entered into a share exchange agreement with Mr. William Chi Hung Tsang, the sole beneficial owner of the share capital in General Business Network (Holdings) Ltd., a Hong Kong company. Pursuant to the Share Exchange Agreement, we acquired from Mr. Tsang all of the issued and outstanding shares of General Business Network in exchange for 4,000,000 shares of our common stock and warrants to purchase an additional 4,000,000 shares of our common stock (the “Tsang Warrants”) at an exercise price of $0.92 per share. As of the date of acquisition, General Business Network owned two rental properties located at 20/F, Goldlion Digital Network Center, Unit 01-10, 138 Tiyu Road East, Tianhe, Guangzhou, the PRC and Flat B, 12/F., Champion Center, 301-309 Nathan Road, Hong Kong, collectively valued in excess of $4,000,000. On January 24, 2003, 4,000,000 shares of our common stock and the Tsang Warrants were issued to Mr. Tsang; to date, the Tsang Warrants have been fully exercised.

On May 7, 2004, through one of our wholly-owned subsidiaries, we acquired 51% of the capital stock of CEO Clubs China Limited, a Hong Kong corporation (“CEO Clubs China”) for a total consideration in cash and shares of our common stock in the amount of $360,000, payable $120,000 in cash and $240,000 in market value of our common stock (80,000 shares) and a commitment to provide operating cash in the amount of $120,000. CEO Clubs China has authorized chapters to operate under the “CEO Clubs” trademarks in the Greater China Region, including the PRC, Hong Kong and Taiwan. Comprised of thirteen chapters in the U.S. and China, the CEO Clubs are a by-invitation-only membership association. Members must be chief executive officers of businesses that have above $2,000,000 in annual sales. Our average club member has $20,000,000 in annual sales. In fiscal year 2002, CEO Clubs opened its first international chapter in China.

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On August 2, 2004, we consummated an acquisition of 51% of the capital stock of Guangdong New Generation Commercial Management Limited (“New Generation”), a limited liability company organized and existing under the laws of the PRC, for an aggregate consideration of $10,232,000, payable approximately $2,741,000 in cash and approximately $7,487,000 in market value of our common stock (4,081,238 shares). One of our purposes for the acquisition was because New Generation was a formidable competitor in the travel agency business through operations of its five subsidiaries and twenty-one selling points in Southern China and a significant competitor in ticketing sales for international and domestic flights as well as inbound business travel. In addition, New Generation’s goal was to become one of the major consolidators of hotel rooms and airline tickets in China. By acquiring New Generation, we have added value to our business and eliminated this competition. New Generation has already acquired the necessary licenses to operate as a ticketing and travel agent in the PRC, a highly regulated business. New Generation’s business also includes insurance operations through its subsidiary, Huahao Insurance, and it is a licensed insurance agent in China to provide accidental and life insurance policies. The two main revenues managed by New Generation are those from the travel agency business and the insurance business. The financial results from Huahao Insurance are consolidated with the financial results of New Generation after Huahao Insurance was acquired by New Generation on June 30, 2004. While there can be no assurances of success, we expect that New Generation will contribute a significant revenue base to our company.

On September 25, 2006, we entered into an agreement to acquire a 25% interest in CWT International Excursion Investment Limited (“CWT Excursion”), a business travel investment company, which owns a 51% controlling interest in Suzhou Tongli ( International) Excursion Development Limited (“Suzhou Tongli”), the sole legal tourism operator and planner for Tongli. Tongli is an ancient town in Jiangsu province of China and home of the Tuisi Garden, a UNESCO World Cultural Heritage site. Under the terms of the agreement, we issued nine million shares of our stock to acquire the interest in CWT Excursion. In addition, we were eligible to acquire an additional 35% interest (or up to 60% majority ownership) in CWT Excursion within the next 12 months. The acquisition of CWT Excursion provided us with the higher margin tourism segment of the travel business.

On September 29, 2006, China Chance Enterprises Limited,(“China Chance”), a wholly owned subsidiary of the Company, entered into a Sale and Purchase Agreement (the “Agreement”) with Wisdom Plus Limited, a limited liability company organized and existing under the laws of the British Virgin Islands (“Wisdom Plus”), pursuant to which China Chance agreed to sell and Wisdom Plus agreed to purchase, all of the outstanding registered shares (the “Shares”) of Rejoice Success Limited, (“Rejoice Success”) an indirect wholly owned subsidiary of the Company. The purchase price for the Shares was $4.0 million, payable in installments in accordance with the schedule set forth in the Agreement. Rejoice Success owns 60% of the outstanding capital stock of General Business Network (Holdings) Ltd., a limited liability company organized under the laws of the Hong Kong SAR of the People’s Republic of China (“Holdings”), Holdings owns 100% of the outstanding capital stock of General (GZ) Business Network Limited, a limited liability company organized under the laws of the People’s Republic of China (“GZ Business”), and GZ Business owns 51% of the outstanding capital stock of New Generation. As a result of the sale, we transferred 30.6% ownership of New Generation to Wisdom Plus and will receive a total of $4.0 million in cash by July 29, 2007.

History of Virtual Edge

Virtual Edge was incorporated in the British Virgin Islands on February 18, 1999 as a non-operating holding company. We currently own 100% of the capital stock of Virtual Edge.

On October 5, 1999, pursuant to a share exchange, Virtual Edge acquired a majority interest in Infotech Enterprises Limited (“Infotech”). On October 18, 2000, pursuant to a Share Exchange Agreement with Vast Opportunity Limited, we acquired the remaining interest in Infotech. Infotech was incorporated on July 2, 1999 and is engaged in building a bilingual (Chinese and English) Business-to-Business internet portal. We currently operate the business operations of Infotech through Virtual Edge.

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On May 9, 1997, the co-operative joint venture of our Beijing World Trade Center Club was formed initially by Canada Belford Enterprises Ltd. (Belford), a wholly owned company by our ex-CEO Mr. John Hui. On October 10, 1999, Virtual Edge signed an agreement with Belford pursuant to which Belford agreed to transfer its 75% interest in Beijing World Trade Center Club (“Beijing WTC Club”) to Virtual Edge. Beijing WTC Club was engaged in the establishment of the Beijing World Trade Center Club and currently provides and will continue to provide recreation, business center services, communication and information services, product exhibition services, commercial and trading brokerage services to its members. The Beijing World Trade Center Club is located at 2nd Floor, Office Tower II, Landmark Towers Beijing, 8 North Dongsanhuan Road, Beijing, the PRC.

On November 10, 2001, Virtual Edge signed an agreement with Guangzhou City International Exhibition Co., Ltd. pursuant to which a co-operative joint venture company, Guangzhou World Trade Center Club (“Guangzhou WTC Club”) was formed to operate a business club in Guangzhou, the PRC, which club shall provide services including food and beverages, recreation, business center, communication and information, products exhibitions, as well as commercial and trading brokerage services to its members. Virtual Edge shares 75% of the profits from the operation of Guangzhou WTC Club. Guangzhou WTC Club had its grand opening on January 28, 2002. The Guangzhou World Trade Center Club is located at 3^rd Floor, Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou PRC.

We currently operate the Beijing World Trade Center Club and Guangzhou World Trade Center Club through Virtual Edge.

Overview Of Our Company’s Three Business Lines

Our business plan involves the pursuit of three distinct lines of business including:

·   Business Clubs. We have business clubs located in Guangzhou and Beijing. Each business club is indirectly associated with the World Trade Center Association, by which we have positioned ourselves as a platform to facilitate trade between China and the world markets.

·   Business Travel and Related Service. We provide business travel and related services to our business club members through our affiliated New Generation Group of companies which provide business travel services, act as a consolidator of airline tickets and hotel accommodations in China and as an agent for the sale of life and accident insurance in the Guangzhou Province of China. The strategic acquisition of Suzhou Tongli provided the Company with entry into the high margin tourism segment of the travel business

·   Business Value-Added Services. We provide value-added services, including business consulting services, interactive marketing and incentive programs for merchants, financial institutions, telecom operators, and large corporations. In addition to these services, we also plan to provide business consultancy services by focusing on (1) the financial advisory sectors, including market and industrial research and corporate restructuring and planning; (2) developing the international trade dimension of China enterprises and assisting foreign companies to establish their businesses in China; and (3) formulating marketing strategies. A small part of the business value-added services commenced operations in the year 2002 through Virtual Edge Limited, while the majority of these value added services commenced in the last fiscal quarter of 2004.

Our executive office is located at 3rd Floor, Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou, the PRC 510620.

Our segment revenues are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. In this document, unless otherwise specified, all dollar amounts are expressed in United States Dollars.

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China World Trade Corporation

Segment Revenues

Year ended December 31

	2006					2005					2004
	US$		%			US$		%			US$		%
Business Club		712,368		16.4	%		894,550		11.4	%		551,497		17.8	%
Business Travel Services		2,689,139		62.0	%		4,983,468		63.6	%		1,671,605		54.1	%
Business Value-added		927,445		21.4	%		1,618,413		20.6	%		40,695		1.3	%
Others(1)		10,385		0.2	%		342,793		4.4	%		828,947		26.8	%
TOTAL		4,339,337		100.0	%		7,839,224		100.0	%		3,092,744		100.0	%

⁽¹⁾ Other revenues in year 2004, year 2005 and year 2006 were mostly generated from cattle hide trading business and rental income of our wholly  owned properties in Guangzhou and Hong Kong.

Our Corporate Structure

We are a holding company for 11 direct and indirect, majority and wholly-owned subsidiaries that operate businesses in China. We are not an "investment company" as such term is defined in Section 3 of the Investment Company Act of 1940, as amended. Seven of these companies are incorporated under the laws of the British Virgin Islands, one under the laws of Hong Kong, and the remaining 3 in the People’s Republic of China. All of our business operations are located in China. Set forth below is an organizational chart depicting the relationships among our various companies.

·   Business Clubs: We carry out our Business Clubs operations through our subsidiaries Guangzhou World Trade Center Club Limited, Beijing World Trade Center Club, and CEO Clubs China Limited. The Business Clubs commenced operations in August 2002.

·   Business Travel: Our Business Travel operations are managed by New Generation which consists of a group of seven individual companies and Suzhou Tongli International Execursion Development Ltd.. The main revenue streams generated by our Business Travel operations are from the travel agency business and the tourist entrance fee from Tongli.

·   Business Value-Added Services: Our Business Value-Added Services are offered through three of our subsidiaries including (1) Guangzhou World Trade Link Information Service Limited, (2) Creative Idea Enterprise Limited and (3) Virtual Edge. Guangzhou WTC Link Information Service Limited has provided short message service and customer relationship management services since July 2004. Creative Idea Enterprise Limited and Virtual Edge have each provided consultancy services since October 2002. Our consultancy services include the provision of market and industrial research, corporate restructuring and planning; and introduction of potential business affiliations.

The remainder of our revenues are generated from rental income on investment property held by our subsidiary General Business Network (Holdings) Limited. .

[The Remainder of Page Intentionally Left Blank]

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Revenue Derived From Our Businesses

Fiscal 2006: In fiscal 2006, we derived approximately $712,000 in revenues, representing 16.4% of total revenues from our Business Clubs operations; approximately $2,689,000 in revenues, representing 62.0% of total revenues from our Business Travel Services; approximately $927,000 in revenues, representing 21.4% of total revenues from our Business Value-Added Services; and approximately $10,000, representing 0.2% of total revenues from Rental.

The rental properties include:

·   Wholly owned rental property in Hong Kong located at 1209, 12/F., Champion Building, 301-309 Nathan Road, Kowloon, Hong Kong. This property generated $10,385 in revenue for fiscal 2006 and has been indirectly sold upon the disposal of 60% equity holding of General Business Network (Holding) Limited on September 29, 2006.

Business Plan For Our Business Clubs

The Opportunity in China. China has been considered one of the fastest growing economies in the world. The accession into the World Trade Organization will offer new opportunities for foreign companies to invest and do business in China. WTO membership for China will change the methods of market entry for overseas companies. Foreign companies will need to have well-tailored plans to cope with China’s target audience, services, marketing, finance, and human resources for the effective entry into the China market. The unique business culture and legal system in China will cause the local business information and services in China to become a key component to commerce.

As a result of lower barriers to entry into the China market, and a more attractive investment environment in recent years, we believe that many small and medium sized foreign enterprises will have investment opportunities in China for the first time. These foreign companies will need up-to-date business intelligence and know-how to successfully invest in the Chinese market.

China’s accession into the WTO also provides significant business opportunities to the small to medium size private Chinese companies. The increase in involvement from foreign companies and investors in the China market means more opportunities to do business with foreign companies. Under the trend of globalization, the Chinese market will evolve from many segmented and monopolized markets to an integrated national market that is open to the world economy. The small and medium sized companies in China will enjoy much lower cost to enter into the worldwide market but will also confront more competition, lowered profit margins, and new rules of the game. These Chinese companies will need up-to-date business intelligence, professional strategic planning and the access to the worldwide business networks to ensure success in the new environment. And with its imminent accession into WTO, there will be unique opportunities for foreign investment and international trade.

The World Trade Centers Association (“WTC Association”) is a not-for-profit corporation that focuses on promoting and assisting world trade activities. Its mission is to encourage world trade by fostering and supporting the development and operation of World Trade Centers in every region of the world. WTC Association was established in 1970 and has members from more than 330 cities in about 100 countries with global members of over 750,000 enterprises.

The World Trade Centers (“World Trade Centers”) are separate entities which are licensed by the WTC Association, each of which generate revenue and profit from operating businesses with access to a diverse array of state-of-the-art international trade services and facilities, which enables them to facilitate international trade. Under the jurisdiction of the WTC Association, there are two types of licenses that are available including (1) a license which enables the licensee to operate a World Trade Center Club in cooperation with China’s Commission for the Promotion of International Trade, and (2) a license which enables the licensee to designate a building as a “World Trade Center” but not operate such a club. We only have licenses that enable us to operate World Trade Center Clubs and, as previously mentioned, we currently have two World Trade Center Clubs in operation.

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In the WTC Association, every local member of a World Trade Center in a city is automatically a member of all World Trade Centers worldwide. This helps the World Trade Centers to market their local membership, and also vastly increases the amount of services that a World Trade Center can offer to its local members. Therefore, the World Trade Centers worldwide form a reciprocal business network for businesses to access the international trade resources that may be expensive and even inaccessible in a domestic environment.

We plan to open and operate additional World Trade Center Clubs (also referred to as our “Business Clubs”), which will be licensed by the WTC Association, in major cities in China, where Business Club members can relax, entertain, network and meet potential business affiliates in person, or via the Video Conferencing facilities of the WTC Association worldwide network.

The WTC Association has granted various licenses to the regional branches of the Trade Promotion Commission. The WTC Association can grant either regular full membership licenses or affiliate membership licenses to various branches of the Trade Promotion Commission, depending on the initial membership fee paid.

Through our wholly-owned subsidiary, Virtual Edge, we have formed 20-year co-operative joint ventures with the business subsidiaries of the Trade Promotion Commission including (1) the Beijing Wanlong Economic Consulting Limited for the joint-venture company Beijing World Trade Center Club and (2) the Guangzhou City International Exhibition Co. Ltd. for the joint venture company Guangzhou World Trade Center Club. Our Guangzhou World Trade Center Club and Beijing World Trade Center Club were both granted regular full membership licenses. We indirectly own 75% of the joint venture companies and the remaining 25% are owned by the business subsidiaries of the Trade Promotion Commission. Each arrangement may be terminated in the event the venture suffers material business setbacks or if a party materially breaches its obligations under the operating contract. We acquired the operation rights of regular full membership from WTC Association for running the world trade center clubs resulting from these two joint venture companies.

Under the co-operative joint venture of both Beijing World Trade Center Club and Guangzhou World Trade Center Club, we are obligated to pay a minimum of RMB150,000 (or approximately $18,500) annually until reaching their respective proportional profit sharing of 25% each to Beijing Wanlong Economic Consulting Limited and Guangzhou City International Exhibition Co. Ltd. They in turn pay WTC Association an annual fee of $10,000 for each individual world trade center club. Other than the annual fee which we pay to the business subsidiaries of the Trade Promotion Commission, we do not have any revenue sharing obligation with World Trade Center Association.

Facilities. The Guangzhou World Trade Center Club and Beijing World Trade Center Club provide a full range of top quality commercial and recreational services to our members. The clubhouses are luxuriously decorated and provide an elegant environment under which members can enjoy our facilities.

The facilities in our Beijing World Trade Center Club include snack bars, seminar and conference rooms, executive suites, office and meeting room packages, videoconferencing facilities, and exhibition rooms. The facilities in our Guangzhou World Trade Center Club include western fine dining, seminar and conference rooms, executive suites, office and meeting room packages, videoconferencing facilities, exhibition rooms, and cigar and wine corner. The business services offered by both the business clubs to its members include (i) liaison work with potential trading partners, (ii) international economic and trade exhibitions and seminars, (iii) interpreters and secretarial services, (iv) organized trips to participate in World Trade Center Association sponsored activities, (v) reception of visiting delegations of foreign World Trade Center Association member units, (vi) arrangement of meetings with Chinese government bodies, business corporations, and (vii) legal consultancy and travel management services.

Events Management Services. We assist foreign companies to organize and participate in conferences, exhibitions and special events such as the “beer festival” in China and assist Chinese companies to organize and participate in conferences and exhibitions overseas. We have already generated revenue from this fee based service business.

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Virtual Office. Virtual office services help foreign companies to establish a presence in China at minimum cost. Each client will be assigned a dedicated phone number, fax number and mail address. The phone number can be forwarded to a number assigned by the client, or be answered by a well trained secretary who takes care of the communication for the client. Foreign companies can also manage their communication with their China affiliates over the Internet. These services started generating revenue in 2004 and a monthly fixed fee is charged for each account.

Marketing Strategy. We plan to market memberships in our Business Club mainly to (1) international companies, (2) businessmen who conduct business in China and with local Chinese companies and (3) businessmen seeking business opportunities within and outside China. We will utilize the good reputation and recognition of WTC Association name and the recreational and business facilities which will be offered at each Business Club to establish the Guangzhou Club, Beijing Club and other potential Business Clubs in various cities in the PRC as the premier business clubs of their kind. We also hope to make the ChinaWTC.com website into a distinctive Chinese/English language Internet portal.

We plan to achieve our marketing goals through (i) placing advertisements with traditional media, such as newspapers, television, radio, magazines etc., (ii) placing banners on high traffic web sites, (iii) sending e-mails to potential users, (iv) participating in trade shows, (v) employing the services of external public relations and marketing firms, (vi) airing television “infomercials” and talk shows, (vii) placing outdoor advertising signs and (viii) attending / holding press conferences. We intend to form strategic alliances with companies that can contribute services and local expertise in various market sectors. These alliances will increase our content and navigation services, support our advertising services and expand our distribution networks. We intend to form vertical alliances, such as exhibition management companies and travel agents, which will either allow us to integrate their products to our services offerings or to access their distribution networks. We will also form horizontal alliances, such as golf clubs and other business clubs, to increase our client base.

An integral part of our success is dependent on the development and enhancement of our products and services. We will incorporate new technologies from third parties, expand products and services internally and conduct market research to remain aware and informed of the evolving user tastes and latest technologies. The New Generation acquisition has demonstrated the success of our strategies to grow our revenues through vertical consolidation. By acquiring New Generation, we have integrated the services offered by New Generation into the services offered by the Business Clubs. The Business Clubs services have also created value to New Generation by allowing New Generation to offer premium services to a selected group of important clients.

On the other hand, the acquisition of the CEO Clubs China is an example of our strategies to horizontally consolidate other business clubs so as to increase our client base.

Sources of Income. We will generate income from our Business Clubs in several ways.

We intend to expand our Business Clubs and operate Business Clubs in major Chinese cities. While the worldwide business network from WTC Association together with the reciprocal services will be the core attraction to businesspersons in China, the business community that we maintain in the major Chinese cities will become a more valuable asset in the long term. Through our presence in major cities in China, we will develop a community of active businesspersons from small and medium sized enterprises with a common interest in world trade.

Additionally, our Business Clubs intend to generate revenue from the owners and senior management of small and medium sized enterprises in China, by providing a full range of top quality commercial and recreational services, and education and business networking programs. Our Business Club will also help members to liaise with potential trading partners from overseas, to join international economic and trade exhibitions and seminars, and to organize international business trips.

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As part of the reciprocal arrangement under the WTC Association, the Business Clubs will also provide services to visiting delegations from foreign World Trade Center members. The China World Trade Business Club will help foreign companies or businesspersons to minimize the barrier of doing business in China. Services provided to foreign companies and businessperson may include organizing meetings with Chinese government bodies, business corporations and potential affiliates.

The revenue that we have derived already from the Business Club business comes directly from (1) membership fees, (2) fees collected from training and (3) events, such as seminars.

At each Business Club will be a Business Center, which is operated for the benefit of the members and others. While the Business Center’s services are not confined to members of the Business Club, members of the Business Club will enjoy special discounts for the Business Center services and more dedicated support from the staff of the Business Club.

The revenue we have derived from a Business Center comes directly from (1) rental fees of facilities and (2) service fees. We will derive income from the Business Center providing (i) temporary offices, seminar and conference rooms, video conferencing facility, exhibition rooms, interpreters and secretarial services and business consultation services.

Primary Clientele. The main clients of our Guangzhou World Trade Center Club in year 2006 included:

·   Greentree Financial Group (China) Ltd. which accounted for 19% of the total revenue of Guangzhou World Trade Center Club;

·   Mercury Interactive Corporation, which accounted for 11% of the total revenue of Guangzhou World Trade Center Club;

·   Hyperion Solutions Corporation, which accounted for 10% of the total revenue of Guangzhou World Trade Center Club; and

·   Esko-Graphics (Shanghai).Ltd., which accounted for 5% of the total revenue of Guangzhou World Trade Center Club.

Collectively, the above four clients aggregately representing over 45% of the total revenue of Guangzhou World Trade Center Club. These above four clients account for a considerable portion of the total revenue of Guangzhou World Trade Center Club because all of these clients use our “Smart Office” under a fixed term from a one-month period to a 12 month period. We charge each of these clients additional fees for their uses of other facilities, such as teleconferencing, seminar rooms and other electronic equipment. In addition to these four main client, other clients include some international and domestic well-known enterprises, such as Koenig & Bauer AG, Landesk Ltd., Maguire Products Asia Pte., Ltd. etc.

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The main clients of our Beijing World Trade Center Club in year 2006 included:

·   AirVana Holdings Inc., which accounted for 14% of the total revenue in 2006;

·   Virgin Atlantic Airway, Ltd., which accounted for 10%of total revenue in 2006;

·   Pegasus Solutions Asia, LLC, which accounted for 9% of the total revenue in 2006; and

·   M.Tech (Shanghai) Co. Ltd..which accounted for 9% of the total revenue in 2006.

Other clients included The Mathworks Inc., Standard Life Assurance Company, and other international companies.

Potential Income From Potential License Agreements. We intend to negotiate and acquire the necessary approval from WTC Association to license the China World Trade Center intellectual property rights including the logo and trademark to third parties. The licensees may use our logo and trademark to quickly establish a brand for their products such as office accessories, or to attract a group of clients for certain services such as credit cards offered by the Business Value-Added division. Revenue will be generated from royalty fees, which may be paid in cash, stock or other property.

Competition. There are a number of organizations utilizing the word of “Club” in China, such as the Beijing American Club, which offers more in terms of recreational facilities and services. There are other organizations, such as the American Chamber of Commerce, which provide limited trades and business information and networking capabilities. All other clubs and organizations in Guangzhou and Beijing only operate as clubhouses with local presence. On the contrary, we operate under the international brand name of “World Trade Center Club” exclusively in a certain region of PRC area. As a result, we out-compete the other players with our reciprocal membership advantage by leveraging on the global network of World Trade Center Clubs and among our World Trade Center Clubs in China. The management believes there will not be other business clubs in the regions that could operate under a similar model and this would provide the competitive advantage of our Business Clubs operations.

Our management believes that there is no single source of information and research report which is sophisticated enough for us to provide a meaningful estimate of the number of competitors and our competitive position in the business clubs industry.

Employees. We have 39 employees in our Business Clubs as of December 31, 2006. None of them are parties to any union or collective bargaining agreement.

Governmental Regulation of Business Club Operations in China. The operation of our Business Clubs must conform to the governmental regulations and rules of the Peoples’ Republic of China. The practical effect of the People’s Republic of China legal system on our business operations in China can be viewed from two separate but intertwined considerations:

First, as a matter of substantive law, the Foreign Invested Enterprise laws provide significant protection from government interference. In addition, these laws guarantee the full enjoyment of the benefits of corporate Articles and contracts to Foreign Invested Enterprise participants. These laws, however, do impose standards concerning corporate formation and governance, which are not qualitatively different from the General Corporation Laws of the state of Nevada in the United States. Similarly, the People’s Republic of China accounting laws mandate accounting practices which are not consistent with US Generally Accepted Accounting Principles. The China accounting laws require that an annual “statutory audit” be performed in accordance with People’s Republic of China accounting standards and that the books of account of Foreign Invested Enterprises are maintained in accordance with Chinese accounting laws. Article 14 of the People’s Republic of China Wholly Foreign-Owned Enterprise Law requires a Wholly Foreign-Owned Enterprise to submit certain periodic fiscal reports and statements to designate financial and tax authorities, at the risk of business license revocation.

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Second, while the enforcement of substantive rights may appear less clear than United States procedures, the Foreign Invested Enterprises and Wholly Foreign-Owned Enterprises are Chinese registered companies which enjoy the same status as other Chinese registered companies in business-to-business dispute resolution. Because the terms of the respective Articles of Association provide that all business disputes pertaining to Foreign Invested Enterprises are to be resolved by the Arbitration Institute of the Stockholm Chamber of Commerce in Stockholm, Sweden applying Chinese substantive law, the Chinese minority partner in our joint venture companies will not assume a privileged position regarding such disputes. Any award rendered by this arbitration tribunal is, by the express terms of the respective Articles of Association, enforceable in accordance with the “United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)”. Therefore, as a practical matter, although no assurances can be given, the Chinese legal infrastructure, while different in operation from its United States counterpart, should not present any significant impediment to the operation of Foreign Invested Enterprises.

China’s Accession into the WTO. On November 11, 2001, China signed an agreement to become a member of the World Trade Organization, sometimes referred to as the WTO, which is the international body that sets most trade rules, further integrating China into the global economy and significantly reducing the barriers to international commerce. China’s membership in the WTO was effective on December 11, 2001. China has agreed upon its accession to the WTO to reduce tariffs and non-tariff barriers, remove investment restrictions, provide trading and distribution rights for foreign firms, and open various service sectors to foreign competition. China’s accession to the WTO may favorably affect our business in that reduced market barriers and a more transparent investment environment will facilitate increased investment opportunities in China, while tariff rate reductions and other enhancements will enable us to develop better investment strategies and attract investment capital. In addition, the WTO’s dispute settlement mechanism provides a credible and effective tool to enforce members’ commercial rights. Also, with China’s entry to the WTO, it is believed that the relevant laws on foreign investment in China will be amplified and will follow common practices.

Business Plan For Businesses Travel Services

We engaged in the businesses travel services through our indirect 51% ownership of the New Generation Group of companies and our indirect 12.8% ownership of SuzhouTongli. On September 29, 2006, management made a decision to sell 60% of our equity holding of General Business Network (Holdings) Ltd., which holds 51% of the outstanding capital stock of New Generation. As a matter of fact, New Generation became one of our associated companies since the disposal of 60% equity holding of General Business Network (Holding) Ltd. New Generation has seven operating subsidiaries in Southern China through which it operates these businesses. We believe that the equity holding on both Tongli and New Generation will allow us to participate in a fast growing travel and tourism industry in China, which are set forth below, although there can be no assurances that we will be able to capitalize on them.

New Generation’s Business Travel Services. We seek to serve China’s emerging class of frequent independent travelers, or FITs, who engage in business and leisure travel on their own instead of traveling in groups. Through our professional team of staff, our nationwide 24-hour toll-free call center, our user-friendly Chinese and English language website and our extensive reseller network, we provide our customers with consolidated travel information and the ability to book airline tickets at discounted rates nationwide within China. We also provide our customers with the ability to book hotel rooms at discounted rates in over 220 cities in China. The majority of our hotel suppliers are three-, four- or five-star hotels, as rated by the China National Tourism Bureau, catering to higher-end travelers. We also offer other travel related services, such as vacation packages and corporate travel services, at competitive prices.

We issue and deliver air tickets using a network of local agents throughout major cities in China. New Generation started its hotel booking business in April 2004 and revenue generated from this division is insignificant to date. At this stage in its development, management is concentrating on establishing a nationwide network through forging business affiliations and improving its information technology infrastructure.

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To facilitate rapid growth in hotel booking business, New Generation has created a comprehensive IT platform to facilitate its operation. A call center and website approach are believed to be essential to overcome the requirement of having many geographic locations in order to conduct business. Through its telephone network and its website, New Generation’s hotel booking business is not limited to the established air ticketing network but rather is able to form a more extensive hotel booking network quickly, that will also benefit our air ticketing business.

Suzhou Tongli’s Business Travel Services. Suzhou Tongli is the sole tourism operator and planner of all scenic sites in Tongli Town of Suzhou Province, China, including the Retreat and Reflection (Tuisi) Garden which is recognized as one of the UNESCO World Heritage sites. In additional to having entrance tickets operations rights for Tongli scenic destinations, Suzhou Tongli is working with the government of Tongli to implement tourism programs and to construct service facilities to expand the town’s reputation as the best ancient water village travel destination.

The redeployment of our investment into Suzhou Tongli ensures that the Company will establish an exclusive foothold into a growing and high-end travel market. At present, the revenue of Suzhou Tongli mainly comes from traditional sightseeing entrance tickets, and, in connection therewith, Suzhou Tongli owns the entrance tickets operation rights for 12 scenic spots in Tongli, which include 3 exclusively operated scenic spots and 9 collaboratively operated scenic spots. Besides generating revenues from traditional sightseeing entrance ticketing, the Company endeavours to develop new tourism revenues from a combination of participative tourism programs, leisure tourism, extended vacation tourism, value-added business travel and so on. This new tourism revenue model will extend the Company’s traditional ticket source of revenues to a more comprehensive tourism revenue source which integrates various tourism programs.

Tongli Town is located in Wujiang city, within Jiangsu Province, on the eastern border of China near Shanghai. Well-developed water, land, and air transportation means that Tongli is easily accessible to other major cities, such as Shanghai, Suzhou and Hangzhou. Tongli is surrounded by rivers and lakes and is divided into 15 islands by more than 10 river courses, connected by more than 40 different ancient bridges built at different times, forming the streets going along-side the rivers, creating an interlinked pattern between roads and bridges. The bridges are considered to be Tongli’s signature architectural highlights.

Tongli Town is located at the central area of the Yantze River Delta, which consists of Shanghai, Zhejiang and Jiangsu. The Yantze River Delta is one of the fastest growing districts in China from an economic stand point.. The strong economy in the Yangtze River Delta produces strong demand for tourism and purchasing power in the tourists. For example, Jiangsu province has population of 743.25 million with average GDP per person of US$2,524, compared to China’s urban disposable income of its citizens of US$ 1,294 in 2004. Of the total employees in the Jiangsu province, approximately 10% work in the tourism industry. The average traveling expense in China increased approximately 50% compared with that in 2005.

The Travel And Tourism Industry In China. The facts and statistics used in this registration statement relating to the travel industry and economy in China are derived from various government and institute research publications. While we have taken reasonable care to ensure that these facts and statistics presented are accurately reproduced from such sources, we have not independently verified them. These facts and statistics may not be comparable to similar facts and statistics collected for the industry or economy in the United States and other countries.

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In terms of domestic tourism spending in 2006, the approximately RMB583 billion (US$ 74.7 billion) travel industry in China is large and growing rapidly. We expect the industry to continue to experience rapid growth as China’s economy continues to develop. Travel and tourism in China is characterized by a highly fragmented and inefficient travel service sector due to many factors, including the lack of consolidated hotel ownership, the lack of a centralized hotel reservation system, the localized nature of travel agencies and a dual regulatory regime. We believe that the fragmented nature of the travel market in China will create increasing demand for central reservation platforms such as our own capable of consolidating a wide range of travel information and negotiating favorable terms with travel suppliers on the basis of scale from our aggregated demand.

According to the China National Tourism Administration, as of the end of 2005, China had more than 16,800 travel agencies. As the requirements of travelers become more complex, we believe that these local agencies, which had been accustomed to providing services using state-owned travel suppliers, have been increasingly unable to respond to the changing needs of business and leisure travelers in China. In addition, the development of China’s tourism infrastructure has resulted in an increasing number of travelers who choose to engage in leisure travel without the constraints inherent in packaged group tours. These frequent independent travelers, or FITs, represent a key segment of the growing travel industry in China that we seek to serve.

The increasing accessibility of the Internet in China creates a foundation for new markets and opportunities, providing the ability to bring together a large number of segmented suppliers and customers in a highly fragmented travel industry. We believe that we are well positioned to benefit from these trends in China’s travel industry.

According to market data from CEIC Data Company Ltd., the frequent independent traveler, or FIT, segment of travelers grew at an approximately 10.3% compound annual growth rate from 2005 to 2006 and is the largest growing group of travelers in China. FITs are defined as travelers who do not travel with tour groups and who require flexibility in the selection of accommodations and transportation. FITs are typically more sophisticated urban dwellers who value customized experiences. We expect that as Chinese travelers become wealthier and more experienced with leisure travel, the appeal of traditional tours will become less important than the ability to arrange one’s own schedule.

Traditionally, most companies in China have relied on either local travel agencies or their internal resources for business travel planning. Companies in China have begun to recognize the importance of focusing on their core competency by outsourcing non-critical functions. A growing number of medium and large-sized companies are beginning to centralize their corporate travel management by outsourcing to professional travel service providers.

Market Inefficiencies and Fragmentation. The travel market in China is highly fragmented with an underdeveloped booking, reservation and fulfillment infrastructure, and with no dominant nationwide travel agencies. As a result of market reforms, a gradual shift from state-owned to privately-owned travel agencies and changing travel patterns, the travel market in China is undergoing a period of change. While competition among the older state-owned travel agencies and the privately owned travel agencies has significantly promoted the development of China’s travel service, the industry remains inefficient and is likely to remain so in the foreseeable future.

Air-ticketing system. Currently, TravelSky Technology Limited, or TravelSky, operates the only nationwide system for air-ticket reservations in China. Consumers in China do not have access to direct bookings on TravelSky unless it is done through individual travel agencies. Moreover, the delivery of air tickets remains inefficient. The majority of consumers in China receive their air tickets through physical delivery and payment to the travel agency is made upon delivery. The process of physical delivery means that consumers in China do not have a reliable or timely delivery process that can respond to last minute travel needs. For example, business travelers who change their flight destinations at the last minute often have to wait for the delivery of a physical ticket before they can initiate their travel. While some airlines in China have recently begun to offer electronic ticketing, there is currently no universal electronic ticketing system available. The International Air Transport Association recently announced that all members should adopt electronic tickets in 2007. As the employment of e-ticketing requires more capital investment on IT and relevant facilities, as well as more investment on staff training, smaller players will most likely be shaken out of the market during the process. On the other hand, this trend implies that business opportunities for larger agencies with relatively mature business models and operating at a large scale, such as New Generation, would survive.

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Hotel reservation system. According to the Year Book of China Tourism Statistics 2006, as of December 31, 2005, China had 11,828 star hotels, which includes 4,291 three-star hotels, 1,146 four-star hotels and 281 five-star hotels. Hotels in China are generally run independently and are not part of large chains. The largest hotel chains in China are small relative to the larger hotel chains in the United States. There is no industry wide electronic reservation infrastructure similar to that available in the United States and parts of Europe.

There is no national distribution system for hotel rooms in China. Travel agents generally have to negotiate room availability and rates with the hotel each time they make a booking. Hotel suppliers in China are not able to benefit from an efficient distribution system that is managed by a centralized process. Until recently, travelers in China did not have access to comprehensive hotel information or a central location for bookings. Instead, travelers in China are still mainly interacting through walk-in room reservations, direct call-in reservations, business conventions and traditional travel agency bookings. There are some business operators, such as CTRIP and E-Long, developing centralized hotel booking platforms in China by utilizing scalable information technology platforms. At present, 70% transactions of CTRIP have been done through telephone with the remaining 30% mainly fulfilled online.

In the on-line travel business, packaging air tickets with hotel rooms is increasingly popular for it reduces customers’ sensitivity on prices and the profit margin appears higher than the traditional method of providing ticketing and hotel booking separately. For Chinese companies conducting this business model, like CTRIP and eLong, hotel booking is the dominant source for revenues. In 2006, CTRIP derived $61,000,000 from hotel booking business, 57% of its total revenues. Air ticketing contributed 36.4% ($39,000,000) in the same year. (Source: CTRIP Annual Report 2006). While in other countries where the “ticket + hotel room” model is more mature, air ticketing usually contributes to a larger portion of total revenues. Unlike either case, New Generation has been largely relying on air ticketing since its inception. For the year ended December 31, 2006, the revenue from air ticketing was about $2,440,000, representing 69.5% of its total revenues. For the nine months ended September 30, 2006, the revenue from air ticketing was $1,850,000, representing 68.9% of its total revenues. New Generation ceased to be a subsidiary of China World Trade Corporation on September 29, 2006 as mentioned in Business Plan For Business Travel Services paragraph on p.15.

Traditional travel agencies. Travel agencies in China tend to be unaffiliated, small office operations. Due to local licensing requirements, even the four travel agencies that operate on a nationwide basis are mostly structured such that each office operates independently from the others. Consumers in China have generally not been able to enjoy the benefits that can be offered by a nationwide, integrated travel agency.

Inefficiencies created by separate regulatory regimes. Under current regulations, two distinct regulatory bodies regulate the travel industry in China. In order to sell air tickets, travel agencies must obtain a permit from the Civil Aviation Administration of China. If a travel agency intends to conduct the air-ticketing business in more than one city, an air-ticketing permit is required for every city, as there is currently no national air-ticketing license. In addition, in order to conduct other travel-related business such as hotel reservations, the travel agency must obtain a separate license from the China National Tourism Administration. Consumers who wish to purchase both air tickets and make hotel reservations through a single agency must use a travel agency that performs both functions. Many traditional travel agencies are unable to perform both functions given the limited number of licenses that can be issued and the costs associated with obtaining each license. As a result, consumers are often forced to arrange travel plans with multiple travel agencies.

Regulation. The travel industry in China is subject to substantial regulation by the Chinese government. This section sets forth a summary of certain significant Chinese regulations that affect our business and our industry. Current PRC laws and regulations impose substantial restrictions on foreign ownership in air-ticketing, advertising and Internet businesses in China.

Foreign Ownership

Air-ticketing. The principal regulation governing foreign ownership in air-ticketing business in China is The Foreign Investment Industrial Guidance Catalogue (2004 revision). Under this regulation, a foreign investor is allowed to own 100% of any wholesale and commission-based agency in China after December 11, 2004. As inferred from the law, air-ticketing does not fall into the statutory prohibited industries like the wholesale of newspaper and magazine, drugs, agricultural chemicals and membrane, chemical fertilizer, refined oil and crude oil, so it is our understanding that beginning on December 11, 2004 foreign investors were permitted to own 100% of an air-ticket agency.

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Travel agencies. The principal regulation governing foreign ownership in travel agencies in China is the Establishment of Foreign Controlled and Wholly Foreign Owned Travel Agencies Tentative Provisions (2003). Recently, foreign investors that (i) primarily engage in travel agency business; (ii) have annual revenue from travel services exceeding $40,000,000 (in the case of foreign-controlled travel agencies) or $500,000,000 (in the case of wholly foreign owned travel agencies; and (iii) are members of travel industrial associations in their home countries or regions have been permitted to establish or own travel agencies in Beijing, Shanghai, Guangzhou, Shenzhen, Xian or other approved national tourism areas, upon the approval of the PRC government, subject to substantial restrictions on the scope of their business. For example, foreign invested travel agencies are prohibited from engaging in the business of overseas travel by PRC citizens or travel by persons from the other regions of the PRC to Hong Kong, Macau or Taiwan. In addition, other than its head office, foreign-invested travel agencies are not allowed to open branch offices.

Our 51% ownership of the New Generation Group of companies involves the foreign control of a travel agency doing business in the Peoples’ Republic of China. The control of a Chinese travel agency is permissible under the Establishment of Foreign Controlled and Wholly Foreign Owned Travel Agencies Tentative Provisions (2003), subject to compliance with the restrictions on the scope of business for passenger air ticket sales agents, commercial agency, tourist information services and marketing research planning. All such businesses are not categorized as “restricted” or “prohibited” by The Foreign Investment Industrial Guidance Catalogue (2004 revision). We believe the competitive advantage of the travel agency business of New Generation is not limited by the scope of business restrictions referred to in the preceding sentence, and, therefore, our operations are not impacted by laws regulating travel agencies.

Advertising Agencies. The principal regulations governing foreign ownership in advertising agencies in China include the Foreign Investment Industrial Guidance Catalogue (2002); and the Administrative Regulations Concerning Foreign Invested Advertising Enterprises (2004). Under these regulations, foreign investors can currently own up to 70% of the equity interest in an advertising agency in China. Beginning on December 10, 2005, foreign investors will be permitted to own 100% of an advertising agency.

Internet content provision. The principal regulations governing foreign ownership in the Internet content provision business in China include the Administrative Rules for Foreign Investments in Telecommunications Enterprises (2001); and the Foreign Investment Industrial Guidance Catalogue (2002). Under these regulations, a foreign entity is prohibited from owning more than 50% of a Chinese entity that provides value-added telecommunications services, including Internet content provision.

General Regulation of Businesses

Air-ticketing. The air-ticketing business is subject to the supervision of the Civil Aviation Administration of China, or CAAC, and its regional branches. The principal regulation governing air-ticketing business in China is the Administration on Civil Aviation Transporting Marketing Agency Business Regulations (1993). Under this regulation, an air-ticketing agency must obtain a permit from CAAC or its regional branch in every city in which the agency proposes to conduct business. The two types of air-ticketing permits in China are permits for selling tickets for international flights and flights to Hong Kong, Macau and Taiwan and permits for selling tickets for domestic flights in China except flights to Hong Kong, Macau and Taiwan.

Travel agencies. The travel agency industry is subject to the supervision of the China National Tourism Administration and local tourism administrations. The principal regulations governing travel agencies in China include the Administration of Travel Agencies Regulations (1996), as amended, and the Rules of Implementation of the Administration of Travel Agencies Regulations (2001). Under these regulations, a travel agency must obtain a license from the China National Tourism Administration in order to conduct cross-border travel business, and a license from the provincial-level tourism administration in order to conduct a domestic travel agency business.

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Advertising.The State Administration of Industry and Commerce is responsible for regulating advertising activities in China. The principal regulations governing advertising, including online advertising in China include the Advertising Law (1994); and the Administration of Advertising Regulations (1987). Under these regulations, any entity conducting advertising activities must obtain an advertising permit from the local Administration of Industry and Commerce.

Internet content provision service and online commerce. The provision of travel-related content on the websites is subject to Chinese laws and regulations relating to thetelecommunications industry and the Internet, and regulated by various government authorities, including the Ministry of Information Industry and the State Administration of Industry and Commerce. The principal regulations governing the telecommunications industry and the Internet include the Telecommunications Regulations (2000); the Administrative Measures for Telecommunications Business Operating Licenses (2001); and the Internet Information Services Administrative Measures (2000). Under these regulations, Internet content provision services are classified as value-added telecommunications businesses, and a commercial operator of such services must obtain an Internet content provision license from the appropriate telecommunications authority in order to carry out any commercial Internet content provision operations in China.

With respect to online commerce, there are no specific Chinese laws at the national level governing or defining online commerce activities, and no government authority has been designated to regulate these activities. There are existing regulations governing retail business that require companies to obtain licenses in order to engage in the business. However, it is unclear whether these existing regulations will be applied to online commerce.

Regulation of Foreign Currency Exchange and Dividend Distribution

Foreign currency exchange. The principal regulation governing foreign currency exchange in China is the Foreign Currency Administration Rules (1996), as amended. Under these rules, the Renminbi is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loans or investments in securities outside China without the prior approval of the State Administration of Foreign Exchange of the People’s Republic of China, or SAFE.

Pursuant to the Foreign Currency Administration Rules, foreign-invested enterprises in China may purchase foreign exchange without the approval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange, subject to a cap approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, the relevant Chinese government authorities may limit or eliminate the ability of foreign-invested enterprises to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside China are still subject to limitations and require approvals from SAFE.

Dividend distribution. The principal regulations governing distribution of dividends by foreign-invested companies include (i) the Sino-foreign Equity Joint Venture Law (1979), as amended; (ii) the Regulations of Implementation of the Sino-foreign Equity Joint Venture Law (1983), as amended; (iii) The Foreign Investment Enterprise Law (1986), as amended; and (iv) The Regulations of Implementation of the Foreign Investment Enterprise Law (1990), as amended. Under these regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, wholly foreign owned enterprises in China are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds unless such reserve funds have reached 50% of their respective registered capital. These reserves are not distributable as cash dividends.

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In addition, our wholly-owned subsidiaries are required to allocate portions of their respective after-tax profits to their enterprise expansion funds and staff welfare and bonus funds at the discretion of their boards of directors. Our affiliated Chinese entities are required to allocate at least 5% of their respective after-tax profits to their respective statutory welfare funds. Allocations to these statutory reserves and funds can only be used for specific purposes and are not transferable to us in the forms of loans, advances, or cash dividends.

Competitive Strengths. We have capitalized on the following competitive strengths in building our travel service business:

Established large scale ticketing business. New Generation has achieved a large scale of transactions in the flight ticketing services. The number of companies providing air ticketing services is much less than those providing services for room reservations in China. And few players engage in both businesses. On the supply side, there are thousands of suppliers for room reservation services, while there is a very limited number of airlines in China. As a result, hotel operators are confronting more fierce competition than airlines are. A small company can easily establish contacts with hotels and be their agents since the capital required is small and the relationship with suppliers is easy to manage. In contrast, to be an air ticketing agent, companies have to overcome high capital barriers first and then work hard to maintain good relationships with the airlines. Both are normally very scarce and critical resources in this business. Since New Generation has achieved large scale in its operations, it has formed mutually dependant relationships with its upstream suppliers and has thereby achieved a strong bargaining position with its suppliers. And the capital requirement is not a barrier to entry or growth for New Generation since its systems are already in place. New Generation has achieved the scale necessary to deal with its upstream suppliers, which include the airlines, as well as its downstream customers. Potential entrants into the industry face these capital and scale barriers to entry.

Extensive resources in the airport. New Generation is the first travel agent in China who provides customers with seamless pre-boarding services in the terminal. In 1998, it established “Red Carpet Service Zone” in the old Guangzhou Baiyun International Airport, the third largest airport in China, to provide customers with extensive services ranging from air-ticketing, check-in services to airport pick-up. After that, Huahao Group, New Generation’s former parent company, and one of our shareholders, entered into a 10-year joint venture agreement with a subsidiary of Baiyun Airport Company Ltd. to provide easy boarding services. The joint venture was reported as the first example in China of cooperation between a private company and the highly regulated airport industry. It is indicative of our extensive resources and those of our affiliates employed at the airport.

Brand leadership. As one of the early movers in the industry to adopt modern communications and Internet technologies, we believe that we have established one of the best-known brands for travel services in Southern China. We believe our customers associate the New Generation brand with value, convenience and confidence.

Nationwide reach for nationwide travel destinations. Our customers can book domestic and international air tickets and make reservations for accommodations at over 3,000 hotels in more than 220 cities across China, vacation packages and rental cars by calling our centralized 24-hour call center from anywhere in China or by logging onto our website. New Generation is ranked one of the top air-ticketing companies in China, in terms of volume of tickets sold and value of transactions. We issue and deliver air tickets using a network of local agents in major cities in China, covering all of the 975 domestic routes.

Total customer focus. We provide our customers with comprehensive travel information, allowing them to conveniently compare prices, browse availability and amenity options, and select the price and supplier that best meet their individual travel needs. Our user-friendly websites, well trained call center representatives and continuous service development efforts reflect our focus on providing superior customer service.

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Strong supplier value. We offer our travel suppliers access to aggregated consumer demand and the ability to promote their services to a large and growing base of frequent independent travelers seeking higher-end travel services. In addition, our call center and web-based transaction and service platform, with its easy-to-use supplier interface, allows our suppliers to promote their services at low incremental cost and with minimal changes to their existing systems.

Streamlined business operations through tailored information management systems. We have drawn on our in-depth knowledge of the business practices unique to China’s travel service industry to develop proprietary processes and technology-based systems for use in our business. These processes and systems incorporate customer relationship management, order processing, financial reporting and performance management and enable us to coordinate effectively the activities of our staff, agents, suppliers and resellers. This results in streamlined operations, a higher degree of operating flexibility and stronger customer relationships through enhanced customer service.

Scalable and cost-efficient services. Our services and transaction processing, enabled by our centralized call-center and web-based distribution technologies, provides superior scalability and significant cost advantages over traditional methods of travel service distribution. We can expand our range of services and extend our geographical reach without making major changes to our existing infrastructure or incurring significant capital costs.

Experienced management. We believe that our management team, which includes Mr. William Chi Hung Tsang, and a seasoned team of senior managers at the operations level with significant experience in the areas of travel service operations, marketing, technology and finance, is well qualified and experienced to handle the challenges of the travel service industry in China.

Suzhou Tongli.The strengths of Tongli lie in its convenient traffic, deep cultural accumulation, rich sightseeing resources, and well-known public fame. Tongli is the only ancient town which contains a World Cultural Heritage - Tuisi Garden. Tongli is the only ancient town integrating the World Cultural Heritage and township lifestyle. Besides, Tongli is the only ancient town acquiring the title of Top 10 Charming Chinese Towns in Jiangsu Province. Special strengths of Tongli comparing with other ancient towns include:(1) National AAAA tourism site; (2) The only provincial culturally protected town in Zhengsu province; (3) 2005 National-Charm famous town; (4) Museum of Ming’s and Qing’s architectures; (5) World Cultural Heritage -- Tuisi Garden ; and (6) Being named as “Natural studio” by National Movie Association as a film base.

Competition. The travel service industry in China is extremely large, highly fragmented and intensely competitive. We compete with eLong, Inc., Ctrip.com International, Ltd, traditional travel agencies such as CTS, CITS and CYTS, and hotel suppliers that sell their room inventory directly to consumers. The major markets in which we currently compete include the relatively affluent coastal areas of China. As China’s market continues to grow, we may face further competition from other new domestic hotel room consolidators or international players such as expedia.com or priceline.com that may seek to expand into China. We may also face increasing competition from hotels and airlines should they further expand into the direct selling market or engage in alliances with other travel service providers besides us. We compete on the basis of brand recognition, selection, price, ease of use, accessibility of information, breadth of services offered, convenience, and customer service and satisfaction.

The management believes that there is no single source of information and research report which is sophisticated enough for us to provide a meaningful estimate of the number of competitors and our competitive position in the travel service industry.

We cannot assure you that we will compete successfully with any of our current or future competitors.

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Opportunity For Growth. We expect the travel and tourism industry in China to continue to grow rapidly as China’s economy continues to expand. China’s travel service industry is fragmented and inefficient. This fragmentation creates a market opportunity for our centralized reservation system for air-ticketing and hotel reservations, which offers comprehensive information and favorable terms negotiated with travel service suppliers across China who are offered economies of scale from our aggregated demand, although the margin is very low.

Business Strategy for Travel Services. Our goal is to establish an exclusive foothold into a growing and high-end business travel market. It allowed us to enter into the high margin tourism segment of the travel business that contains a high entry barrier. We will re-focus our travel-related business services from low margin tourism segment, such as air ticketing to a high margin tourism segment, such as scenic site management with the co-operation and support from local government to become the leading management provider of travel services in China. We seek to achieve revenue and earnings growth by pursuing the following key business strategies:

Strengthen brand awareness and marketing. We seek to strengthen consumer awareness of our brand by pursuing an aggressive marketing strategy based on online and traditional media advertising. We seek to encourage consumer conversion and the use of our services through segment-based marketing, targeted promotions and focused telemarketing efforts.

We also seek to promote the awareness of our brand, including Suzhou Tongli, and increase our penetration among our target customers by leveraging the customer bases of other leading businesses and customer service companies, by (i) increasing advertising using publications such as company brochures and magazines; (ii) cooperating with commercial banks for them to offer co-branded credit cards; and (iii) entering into arrangements with major airlines in China, such as China Southern Airlines, under which travel booking inquiries are directed from their service hotlines to us.

Expand our range of travel services. We intend to capitalize on our leadership in air-ticketing utilizing a centralized modern call center and web-based distribution technologies and leverage the reach and efficiency of our distribution of services by growing our hotel reservations and other travel related services, such as vacation packages, car rentals and corporate travel services. We seek to expand the selection of our destination services, such as restaurant and entertainment bookings, and offer our customers greater flexibility in choosing the desired combination of travel services.

We believe that the extensive network resources based on air-ticketing, IT platform and strategic alliances with other product and service providers will be converted to our advantage, and that competitors will find them difficult to imitate.

Enhance customer experience. We seek to enhance our customer’s experience by providing more personalized care, and by strengthening and expanding travel supplier relationships to offer our customers a wider range of travel services. We seek to deliver consistently high-quality customer service through continuous improvements in the information technology systems utilized in our call center, and in the content, features and functions of our websites.

Enhance efficiency and profitability. We have built our operating infrastructure to take advantage of the inherent cost advantages of our centralized call center and web-based distribution technologies. We also seek to increase the efficiency of our marketing programs by tracking the effectiveness of our expenditures on various marketing activities.

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We continue to capitalize on improvements in electronic commerce infrastructure, such as the introduction of electronic ticketing. By using exclusive online promotional offers, we believe we will be able to benefit from the increasing adoption of online commerce among consumers by attracting additional customers and moving existing customers to our websites, thereby lowering our operating costs.

Enhance our technology infrastructure. We design and maintain our systems with a view to enhancing consumer-friendliness and providing adaptive products and services for our airline and other travel service suppliers. We seek to streamline our transaction processes through ongoing technology upgrades to our transaction and services level.

Selectively pursue complementary acquisitions. We seek to supplement the organic growth of our business by pursuing acquisitions which would enable us to expand our service offerings, our customer base and our distribution network. We seek to capitalize on the opportunities for consolidation in China’s fragmented and inefficient travel service industry by selectively exploring opportunities to acquire other travel service businesses such as air-ticketing agencies, hotel-room consolidators, tour-package agencies and corporate travel providers.

Develop travel products and services for corporate clients. We will enhance our travel services by providing corporate travel services that cover more international corporations and large national corporations in the region. The corporate market is a fast growing market with high profit margin. With our comprehensive resources in ticketing, hotel reservations, business club facilities and airport services, we are confident that we can be one of the leading services providers in the region. At the moment, we have over 30 corporate clients including large scale joint ventures such as Guangzhou Honda and Panasonic Wan Bao. We successfully entered into a service consignment agreement with the Purchasing Office of the Guangzhou City Government. This agreement will extend for two years from January 1, 2005 to December 31, 2006. Under this agreement, we will provide international business travel packages and related services to key personnel of the Guangzhou City Government at premium package prices.

Business Plan For Our Business Value-Added Services

We provide business value-added services to a variety of customers. These services concentrate on business consultancy services, interactive marketing and incentive programs management for merchant chains and large corporations with significant user bases.

Business Consultancy Services. Our consultancy services are focused in two areas. First, we provide consultancy services in the financial advisory sector including mergers and acquisitions advisory services, corporate restructuring advisory services and corporate finance advisory services. A specialty niche has been to consult with and advise local PRC companies in seeking foreign capital for their expansion programs.

Second, we assist Chinese companies in developing the international trade dimension of their own businesses and assist foreign companies to establish their businesses in China. We help Chinese companies in business development, marketing, sourcing and public relationship management in the international business environment.

These services are fee based, and our payment is structured either on a flat fee basis or on a success fee basis. Our consultancy services operation started in the last quarter of 2004 and our related revenues have been generated since early 2005.

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BJ World Trade Full Capital Advisors Inc. Our 55% equity holding subsidiary BJ World Trade Full Capital Advisors Inc. (BWTFCA) is a consulting group with global vision providing business consultancy services for domestic and foreign companies by taking advantage of its own rich business resources, good relationship with governments, expertise and experience in running business at home and abroad. The major services include governance consultancy and international marketing.

Incentive Programs - In April 2003, Guangzhou World Trade Center Club Limited (“Guangzhou WTC Limited”), a 75% indirectly owned subsidiary of us, entered into an agreement with the Agricultural Bank of China providing for the introduction of a co-branded credit card. Pursuant to the agreement, Guangzhou WTC Limited is entitled to 15% of processing fees obtained in connection with the issuance of the credit card, with such amount increasing to 20% once the number of cards issued exceeds 10,000. The agreement is for a term of four years, subject to automatic extension for an additional four year term, unless terminated on two months’ prior notice.

In order to enhance the value and attraction of the co-brand credit card, Guangzhou World Trade Center Club Limited, formed in 2004 has implemented efforts to recruit merchants that will provide discounts of goods and services to the members of the co-brand credit card, and, as such, has become an aggregator for discount merchants. This program is still in development and has been tested out with a limited number of consumers and business associates. It has not been fully rolled out to consumers. There is a substantial risk that the Company will terminate this program due to an unforeseen adverse business environment.

Competition. The definition of value-added services varies from company to company and it is not meaningful to compare our market position with other potential competitors. We provide value-added services on a customized basis, and we are not aware of any other company that offers the services that we do.

Our management believe that there is no single source of information and research report which is sophisticated enough for us to provide a meaningful estimate of the number of competitors and our competitive position in the value-added service industry.

Strategic Investments. We expand our business activities through strategic investments in companies which will directly or indirectly contribute positively to our overall revenues or profits. Strategic ventures which have no positive operation effect with our business or have a negative impact on our cash flow will not be initially considered. A group of business entities or an entity that will enable us to experience intrinsic growth will be considered, especially if they will enable us to evolve into a conglomerate in the Chinese business environment. The Suzhou Tongli acquisition is an example of a major strategic investment by us. By acquiring Suzhou Tongli, we can establish an exclusive foothold into a growing and high-end business travel market, which was parallel to New Generation acquisition in 2004 as low-stream travel business while the Suzhou Tongli is classified as upper-stream travel business.

Employees. We currently have 11 employees in our Value-Added Services division. We believe our future success will depend in large part upon the continued service of our technical and senior management personnel and our ability to attract and retain technical and managerial personnel. There can be no assurance that we will retain our key technical and managerial employees or that we can attract, assimilate or retain other highly qualified technical and managerial personnel in the future. None of our employees are subject to any collective bargaining agreements.

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Item 2. Description of Property

Our main office and the Guangzhou World Trade Center Club facilities are located at 3rd Floor, Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou, and the PRC 510620. Such office and club facilities are held pursuant to a lease from Guangzhou Silver Disk Property Management Co. Ltd., which provides for an aggregate monthly rental of approximately $42,285 (RMB$350,000) and expires on July 31, 2007.

Our Beijing World Trade Center Club facilities are located at 2nd Floor, Office Tower II, Landmark Towers Beijing, 8 North Dongsanhuan Road, Beijing, the PRC. The five-year lease for the location of the Beijing WTC Club facilities, which runs from February 1, 2004 to January 31, 2009, was executed by Beijing Landmark Towers Co Ltd. and Beijing WTC Club. The terms of the lease provide for an aggregate monthly rental amount and management fees of approximately $14,640 (RMB$121,180) and contains a rent free period from February 1, 2004 to January 31, 2006.

Pursuant to the Share Exchange Agreement dated December 17, 2002, entered into by us and Mr. William Chi Hung Tsang, we acquired the entire issued share capital of General Business Network, which owned two commercial properties, one located at 20/F, Goldlion Digital Network Center, Unit 01-10, 138 Tiyu Road East, Tianhe, Guangzhou, the PRC (the “PRC Property”) and the other at Flat B, 12/F, Champion Center, 301-309 Nathan Road, Hong Kong (the “Hong Kong Property”). The PRC Property was sold in May 2005 for approximately $2,460,000. The Hong Kong Property was sold together with the disposal of Rejoice Success Limited on September 29, 2006 after an account of rental income of $10,385 (HK$81,000).

Our Hong Kong office is located Unit A, 5/F., Goldlion Holdings Centre, 13-15 Yuen Shun Circuit, Siu Lek Yue, Shatin, NT, Hong Kong. The office is held pursuant to a lease from Renard Investments Limited which provides for an aggregate monthly rental of HKD26,950 (or US$3,455). The lease runs from February 1, 2006 to January 31, 2008.

Item 3.Legal Proceedings

We are not aware of any pending or threatened legal proceedings, other than as set forth below, in which we are involved. In addition, we are not aware of any pending or threatened legal proceedings in which entities affiliated with our officers, directors or beneficial owners are involved.

On December 10, 2004, Kenneth P. Silverman, Esq., as Trustee for the Estate of Chief Executive Officers Clubs, Inc. (the “Trustee”), filed a Complaint against CEO Clubs China Limited, China World Trade Corporation, Simon Guo and J.P. Li (the “Complaint”), which commenced an Adversary Proceeding relating to a Chapter 7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of New York, captioned as In Re: Chief Executive Officers Clubs, Inc., Debtor. The Complaint alleges, among other things, that certain assets of the Chief Executive Officers Clubs, Inc. bankruptcy estate were transferred to our Company in violation of Section 549 of the Bankruptcy Code. It requests that the Bankruptcy Court order, among other things, a return of such assets by our Company and/or seeks a judgment against us in the amount of not less than US$480,000.

As previously disclosed, on May 7, 2004, the Company acquired 51% of the outstanding capital stock of CEO Clubs China Limited, a Hong Kong corporation (“CEO Clubs China”), through one of its wholly-owned subsidiaries, for a total consideration of cash and shares of common stock amounting to US$480,000. CEO Clubs China is an authorized chapter to operate under the “CEO Clubs” trademarks in the Greater China region, including the Peoples’ Republic of China, Hong Kong and Taiwan.

We have engaged counsel and are vigorously defending the Adversary Proceeding. We filed a Motion To Dismiss which was heard on March 22, 2005, and the judge ruled in favor of the Trustee by refusing to dismiss the case at this preliminary stage of the proceedings. Notwithstanding that decision, our primary defense is that we purchased the stock of CEO Clubs China, and did not acquire any assets of the Chief Executive Officers Clubs, Inc. bankruptcy estate. On March 3, 2007, we were informed that the Trustee has made a Motion to have a settlement to be approved by the Court. We believe that this defense will be meritorious should the matter ever come to trial.

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Item 4. Submission of Matters To a Vote of Security Holders.

No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Report.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Market Information

Our common stock is currently quoted on a limited basis on the Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “CWTD”. The quotation of our common stock on the OTCBB does not assure that a meaningful, consistent and liquid trading market currently exists. We cannot predict whether a more active market for our common stock will develop in the future. In the absence of an active trading market:

(1) Investors may have difficulty buying and selling or obtaining market quotation;

(2) Market visibility for our common stock may be limited; and

(3) A lack of visibility of our common stock may have a depressive effect on the market price for our common stock.

The following table sets forth the range of bid prices of our common stock as quoted on the OTCBB during the periods indicated. The prices reported represent prices between dealers, do not include markups, markdowns or commissions and do not necessarily represent actual transactions.

		High (1)	Low
2006	First Quarter	$2.66	$1.90
	Second Quarter	$2.82	$1.12
	Third Quarter	$1.31	$0.65.
	Fourth Quarter	$0.68	$0.20
2005	First Quarter	$2.66	$1.90
	Second Quarter	$3.25	$1.80
	Third Quarter	$2.56	$1.89
	Fourth Quarter	$2.10	$1.31

Our common shares are issued in registered form. Interwest Transfer Company in Salt Lake City, Utah, is the registrar and transfer agent for our common stock.

Effective September 1, 2002, we executed a 1 for 30 reverse stock split of the outstanding shares of common stock.

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As a result of a debt-to-equity capital restructuring in September 2002, we issued a total of 4,000,000 shares of common stock for a total debt of $2,731,677

As a result of two share purchase agreements dated September 3, 2002 and December 17, 2002, respectively, and entered into between us and Powertronic Holdings Limited, on January 24, 2003 we issued a total of 2,000,000 shares of common stock and warrants to purchase up to 4,000,000 shares of common stock for a total purchase price of $1,000,000 to Powertronic Holdings Limited.

As a result of a share exchange agreement dated December 17, 2002 entered into between the Company and Mr. William Chi Hung Tsang, on January 24, 2003, we issued 4,000,000 shares of common stock and warrants to purchase up to 4,000,000 shares of common stock in exchange of 100% of the share capital of General Business Network (Holdings) Ltd.

As a result of a share exchange agreement dated September 25, 2006 entered into between the Company and Mr. William Chi Hung Tsang, we issued 9,000,000 shares of common stock in exchange of 25% share capital of CWT International Excurtion Investment Limited

As of December 31, 2006, there were 85 holders of record of 43,865,923 outstanding shares of common stock of the Company, not including approximately 5,000 holders of our shares in street name.

Dividends

We have not previously paid any cash dividends on its common stock and do not anticipate paying dividends on its common stock in the foreseeable future. It is the present intention of management to retain any earnings to provide funds for the operation and expansion of our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operation, financial condition, contractual and legal restrictions and other factors the board of directors deem relevant.

Penny Stock Characterization

Our Shares are "penny stocks" within the definition of that term as contained in the Securities Exchange Act of 1934, which are generally equity securities with a price of less than $5.00. Our shares will then be subject to rules that impose sales practice and disclosure requirements on certain broker-dealers who engage in certain transactions involving a penny stock. These will impose restrictions on the marketability of the common stock.

Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $5,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, unless the broker-dealer or the transaction is otherwise exempt, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the Registered Representative and current bid and offer quotations for the securities. In addition a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account, the account’s value and information regarding the limited market in penny stocks. As a result of these regulations, the ability of broker-dealers to sell our stock may affect the Selling Stockholders or other or other holders seeking to sell their shares in the secondary market. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.

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These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. These additional sales practice and disclosure requirements could impede the sale of our securities. In addition, the liquidity for our securities may be adversely affected, with concomitant adverse affects on the price of our securities.

Agreements to Register

We have a Registration Rights Agreement, dated August 26, 2004, with the Purchasers under a Securities Purchase Agreement that was also executed on August 26, 2004, covering an aggregate of 2,321,003 shares of common stock issued to the Purchasers, and shares of common stock issuable to the Purchasers upon the exercise of warrants. In addition, we have a Registration Rights Agreement with Cornell Capital Partners, LP, dated November 15, 2004, covering the 14,285,714 shares of our common stock that may be registered for sale pursuant to the SEDA, in addition to 375,000 shares of common stock issued as compensation under the SEDA.

Shares Eligible for Future Sale

Upon successful filing with the commission of a Registration Statement on Form SB-2, the 16,981,717 shares of common stock sold in this offering will be freely tradable without restrictions under the Securities Act of 1933, except for any shares held by our "affiliates", which will be restricted by the resale limitations of Rule 144 under the Securities Act of 1933.

In general, under Rule 144 as currently in effect, any of our affiliates and any person or persons whose sales are aggregated who has beneficially owned his or her restricted shares for at least one year, may be entitled to sell in the open market within any three-month period a number of shares of common stock that does not exceed the greater of (i) 1% of the then outstanding shares of our common stock, or (ii) the average weekly trading volume in the common stock during the four calendar weeks preceding such sale. Sales under Rule 144 are also affected by limitations on manner of sale, notice requirements, and availability of current public information about us. Non-affiliates who have held their restricted shares for two years may be entitled to sell their shares under Rule 144 without regard to any of the above limitations, provided they have not been affiliates for the three months preceding such sale.

Further, Rule 144A as currently in effect, in general, permits unlimited resales of restricted securities of any issuer provided that the purchaser is an institution that owns and invests on a discretionary basis at least $100 million in securities or is a registered broker-dealer that owns and invests $10 million in securities. Rule 144A allows our existing stockholders to sell their shares of common stock to such institutions and registered broker-dealers without regard to any volume or other restrictions. Unlike under Rule 144, restricted securities sold under Rule 144A to non-affiliates do not lose their status as restricted securities.

Currently, approximately 10,900,000 shares of our common stock are available for sale in accordance with the provisions of Rule 144. Additionally, future sales of stock owned by our affiliates may be permitted according to Rule 144. The availability for sale of substantial amounts of common stock under Rule 144 could adversely affect prevailing market prices for our securities.

Changes of Equity Securities During Period Covered By Report

On April 27, 2006, the Company issued 280,000 shares to Grace Motion Inc. for consulting services provided which included a due diligence report on a target project in China; a financial modeling report on the target,; and providing advice on any possible change of the structure in order to enhance the profitability of the target project. We relied on an exemption from registration provided by Section 4(2) under the Securities Act of 1933, as amended, in connection with this issuance.

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On April 27, 2006, the Company issued 117,000 shares to Mr. Andy Lau for consulting services included information technology and technical framework and infrastructure for information technology in China. We relied on an exemption from registration provided by Section 4(2) under the Securities Act of 1933, as amended, in connsection with this issuance.

On August 15, 2006 we issued 800,000 shares of common stock to Greentree Financial Group, Inc. for consulting services which included (a) assistance in the preparation of private offering documents, (b) compliance with Blue Sky regulations, (c) compliance with the SEC's periodic reporting requirements, (d) tax and accounting services, (e) EDGAR services, (f) preparation of interim financial information, (g) locating product vendors and (h) other consulting services. We relied on an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, in connection with this issuance.

On September 25, 2006, the Company entered into a Share Exchange Agreement (the “Agreement”) with Rainbow Wish Limited, a company organized and existing under the laws of the British Virgin Islands and a wholly owned subsidiary of the Company (“Rainbow Wish”), CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), and Chi Hung Tsang (“Tsang”), the Chairman of the Company and holder of sixty percent (60%) of the capital stock of CWT Excursion, Pursuant to the terms of the Agreement, the Company issued 9,000,000 shares of common stock to Tsang in exchange for the transfer by Tsang of twenty-five (25) common shares of CWT Excursion (the “CWT Excursion Shares”) to Rainbow Wish, representing a 25% equity interest in CWT Excursion. We relied on an exemption from registration provided by Regulation S under the Securities Act of 1933, as amended, in connection with the issuance of shares to Tsang.

Item 6.Management's Discussion and Analysis or Plan of Operation

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This discussion contains forward-looking statements. The reader should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the company. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on actual experience and business development, the company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the company's results of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the company or any other person that the objectives or plans of the company will be achieved.

OVERVIEW

We were incorporated in the State of Nevada in 1998 to engage in any lawful corporate undertaking. Initially, our business objective was to open and operate business clubs in the major cities of China in association with the World Trade Center Association in order to position ourselves as the platform to facilitate trade between China and the world market. We currently operate two clubs, one in Guangzhou and the other in Beijing, PRC. Additionally, we expect to open clubs in Shanghai and Shenzhen, PRC in the foreseeable future. We have grown through acquisitions and internal growth and our business objectives have expanded as set forth in the following paragraphs.

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Our growth and development as a business enterprise has been marked by a number of significant corporate events. Pursuant to a Share Exchange Agreement, dated as of August 10, 2000, between Virtual Edge Limited ("Virtual Edge") and Main Edge International Limited ("Main Edge"), Main Edge transferred all of the issued and outstanding shares of the capital stock of Virtual Edge to the Company in exchange for 1,961,175 shares of our pre-split common stock, representing approximately 75% of our outstanding shares of the common stock. Accordingly, we controlled the operations of Virtual Edge, and Main Edge became our majority stockholder. We then undertook an 8-for-1 forward split that was effective on 15th day of September 2000, which resulted in Main Edge owning 15,689,400 shares of our common stock. Then, five major developments occurred. These were: (i) the consummation of two private placement financings by Powertronic Holdings Limited ("Powertronic") in September 2002 and December 2002 in which it acquired shares of our common stock, (ii) an acquisition of all the issued and outstanding shares of General Business Network (Holdings) Ltd. in December 2002, (iii) a 1-for-30 reverse stock split that was effective on September 1, 2002, (iv) the assignment of the rights of the after tax rental income of certain premises from Mr. Tsang for a five year period in December 2003, and (v) the exercise of warrants for the shares of our common stock by Mr. Tsang and Powertronic in March 2004 and in July 2004, and the further exercise additional warrants in December 2004. As a result of these transactions, Mr. Chi Hung Tsang became the new major shareholder and owns over 12,600,000 shares of our common stock and Powertronic owns over 5,500,000 shares. Mr. Chi Hung Tsang is currently President and Chairman of our Board of Directors.

China World Trade Corporation ("China World Trade") has recently established its businesses into three distinct divisions, namely the club and business center; the business travel services; and the business value-added services. The Club and Business Center division is devoted to the building of the World Trade brand in China. Its objective is to open and operate business clubs in the major cities of China in association with the World Trade Center Association, in order to position the company as the platform to facilitate trade between China and the world market. China World Trade currently operates the Guangzhou World Trade Center Club, consisting of over 4,000 square meters, and The Beijing World Trade Center Club, which is located at 2nd Floor, Office Tower II, Landmark Towers Beijing, 8 North Dongsanhuan Road, Beijing PRC, and consisting of 730 square meters. In addition, since the acquisition of CEO Clubs China Limited ("CEO Clubs") in May 2004, CEO Clubs will complement China World Trade's offerings by targeting higher profile leadership from larger companies than those normally associated with China World Trade. The CEO Clubs family, of which each family member operates independently of each other, has thirteen chapters in the US and China. It focuses on recruiting CEO's of companies with annual sales exceeding $2 million as members. The average member of our affiliated CEO Clubs family has $20 million in annual sales.

Since the completion of the acquisition of majority stake of Guangdong New Generation Commercial Management Limited (the “New Generation Group” or “New Generation”) in August 2004, the Business Travel Services division has provided the necessary platform for China World Trade Corporation to focus on the high growth, travel related businesses. Although New Generation has contributed most of the revenue for the Company since the acquisition, the management of the Company, after careful monitoring the industry for a period of time, noticed that the profit margin of air-ticketing business is diminishing because of the continuous higher fuel price and additional cost associated into it, not to mentioned the foreseeable huge increasing cost on manpower in China because of its improving living standards. The management made a decision on September 29, 2006 to sell 60% of our equity holding on General Business Networks (Holdings) Limited which holds 51% of the outstanding capital stock of Guangdong New Generation Commercial Management Limited. In order to diversify our interest in business related travel services, the management acquired Tongli on September 25, 2006. This strategic acquisition is believed to provide the Company with entry into the high margin tourism segment of the travel business becauseTongli town is quickly becoming one of the most popular domestic and international tourist destinations in China with strong tourism, business travel growth opportunities in the region,

The Business Value-Added Services division concentrates on value-added services of merchant related businesses as well as on consultancy services. Our Company will leverage the network and database of the Business Clubs, New Generation and Tongli to provide business related services to its clients. In addition, this division also provides consultancy services to China World Trade's members and clients in the corporate strategy and business development areas including mergers and acquisitions, corporate restructuring and financing.

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RESULTS OF OPERATIONS

The following table shows the financial data of the consolidated statements of operations of the Company and its subsidiaries for the years ended December 2006 and 2005. The data should be read in conjunction with the audited consolidated financial statements of the Company and related notes thereto.

	Year Ended			% of			Year Ended			% of
	Dec. 31			Revenue			Dec. 31			Revenue
	2006						2005
(In US$ thousands except per share data)
Operating revenues
Club and business centre		712			16.4			895			11.4
Business traveling services		2,689			62.0			4,983			63.6
Business value-added services		928			21.4			1,618			20.6
Others		10			0.2			343			4.4
Total operating revenues		4,339			100.0			7,839			100.0
Gross profit
Club and business centre		675			15.6			735			9.4
Business traveling services		2,167			49.9			4,256			54.3
Business value-added services		927			21.4			(895	)		(11.4	)
Others		10			0.2			124			1.6
Total Gross Profit		3,779			87.1			4,220			53.8
Other expenses
Bad debts		(28	)		(0.7	)		0			0.0
Impairment loss and depreciation		(319	)		(7.3	)		(342	)		(4.4	)
Selling, general and administrative expenses		(8,041	)		(185.3	)		(9,168	)		(116.9	)
Loss From Operations		(4,609	)		(106.2	)		(5,290	)		(67.5	)
Non-operating income (expense)
Other income		44			1.0			42			0.5
Interest income		38			0.9			28			0.4
Interest expense		(209	)		(4.8	)		(136	)		(1.7	)
Equity in earnings of affiliates		(180	)		(4.2	)		0			0.0
Impairment loss on investment in an affiliate		(2,140	)		(49.3	)		0			0.0
Gain (loss) on disposal of interest in a subsidiary		(3,211	)		(74.0	)		86			1.1
Loss on disposal of dormant subsidiaries		(321	)		(7.4	)		0			0.0
Realized gain on disposal of available-for-sale securities		46			1.1			6,080			77.6
Loss on disposal of property, plant and equipment		(9	)		(0.2	)		(255	)		(3.2	)
Profit/(loss) before income tax and minority interests		(10,551	)		(243.1	)		555			7.1
Income tax expense		(103	)		(2.4	)		(254	)		(3.2	)
Profit/(loss) before minority interests		(10,654	)		(245.5	)		301			3.8
Minority interests		563			13.0			(283	)		(3.6	)
Net income/(loss)		(10,091	)		(232.5	)		18			0.2
Earnings (loss) per share
Basic		(0.29	)					0.00
Diluted		(0.29	)					0.00

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FISCAL YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005.

OPERATING REVENUE

The Company has started to recruit members, and to provide club and business center services through its subsidiary Guangzhou World Trade Center Club located in Guangdong Province, the PRC since June 2002, business value-added services and others business through other subsidiaries of the Company since March 2003. We have commenced our operation in the business travel business since our acquisition of New Generation in August 2004. Investment in listed shares and rental incomes are grouped under others operating revenues and others gross profit. Consolidated operating revenue for the twelve-month period ended December 31, 2006 was $4,339,000, compared to $7,839,000 for the same corresponding period in year 2005, a decrease of $3,500,000 or 44.6%. The decrease was mainly the result of the decrease in revenue generated from business travel services; club and business center; the business value-added services and rental incomes.

Of the $4,339,000 revenue in the twelve-month period ended December 31, 2006, approximately $712,000 (16.4%) was generated from providing club related services by Guangzhou World Trade Center Club and Beijing World Trade Center Club, $2,689,000 (62.0%) from business travel services resulting from the acquisition of the New Generation Group, $928,000 (21.4%) from business value-added services, and the remaining $10,000 (or 0.2%) from rental income. The disposal of 60% of our equity holding of General Business Network (Holdings) Limited (“GBN”), which held a 51% equity interest in New Generation, has significantly reduced our operating revenues. Since the disposal was effective on September 29, 2006, only 9 months of operating revenues from New Generation were consolidated into our results of operations.

Consolidated gross profit decreased by $441,000 or 10.4% for the twelve-month period ended December 31, 2006 over the same corresponding period in year 2005. The decrease was predominantly caused by our business travel services resulting from the disposal of 60% of our equity holdings of GBN and New Generation in September 2006 and our club and business center services. Such a decrease was partially offset by the increase in the business value-added services. As a percentage of total operating revenues, consolidated gross profit margins of 87.1% in 2006 increased from 53.8% in 2005. However, the higher profit margin as a percent of operating revenues for the year ended December 31, 2006 as compared to the same corresponding period in 2005 was primarily contributed by the positive margin from our business value-added services as well as the increased profit margin in our club and business centre. We received common stock as compensation from the client for our services rendered. According to EITF Issue No. 00-8, we recognize our revenue in relation to a project using the share price of the common stock we received on the contract date. Subsequently, we subcontracted part of the services of the same project to an independent consultant at a later date and according to FAS 123, paragraph 8, we needed to record the compensation paid to non-employees in exchange of goods and services at fair value. The positive gross profit margin for the year ended December 31, 2006 of our consulting business was the result of the timing difference between the dates of the contract with our client and the subcontracting during an upward trend of the share prices of the common stock we received for services rendered.

Of the $3,779,000 total gross profit for the year ended December 31, 2006, approximately $675,000 (or 17.9%) was generated from providing club and business center services, approximately $2,167,000 (or 57.3%) from business travel services, approximately $927,000 (or 24.5%) from providing business value-added services, and approximately $10,000 (or 0.3%) from rental income. As compared to the same corresponding period in year 2005, the club and business center services represented a 17.4% (or $735,000) of the total gross profit; 100.8% (or $4,256,000) was generated from the business travel business; a negative 21.2% (or $895,000) from providing business value-added services; and the remaining 2.9% (or $124,000) from other (rental and trading) businesses. The shift in segmental distribution was primarily due to the increase in gross profit in the business value-added services, resulting from the services fee renders from our clients. We foresee that this segment mix will continue to change and balance out in year 2007 upon further development in the club and business centre business.

32

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses decreased by approximately $1,127,000 or 12.3% to $8,041,000 for the year ended December 31, 2006 from $9,168,000 for the same corresponding period in 2005. The decrease was mainly a combination of the decrease in the subcontract fee resulting from our consulting business in the amount of approximately $1,200,000, the decrease in general expense of $1,000,000 incurred from disposed New Generation which accounted for 9 months and offset by the increase in other professional fees and marketing and information and technology in the total amount of approximately $1,000,000,.

Of the $8,041,000 selling, general and administrative expenses incurred for the year ended December 31, 2006, the majority of it was approximately $1,524,000 in staff related costs; approximately $1,660,000 in professional expenses in  financial consultancy, investor relations and marketing consultancy; approximately $847,0000 in building management and rental expenses which were necessary for the operations of our world trade centre clubs in Guangzhou and Beijing; approximately $254,000 in director related salaries; approximately $211,000 in the expenses of liquidated damage. Despite the management expects this decreasing trend will likely continue subsequent to the disposal of 60% of our equity interest in GBN and New Generation, they will continue to impose respective measures for trimming costs.

BAD DEBTS, IMPAIRMENT LOSS AND DEPRECIATION

A provision for bad debt of approximately $28,000 for the year ended December 31, 2006, as compared to none for the same corresponding period in year 2005. Total impairment loss and depreciation were approximately $319,000 for the year ended December 31, 2006, as compared to the same corresponding period in year 2005, a decrease of $23,000 or 6.7% from $342,000. The decrease was mainly due to the decrease in depreciation and amortization charge in the amount of approximately $23,000 over the corresponding period in year 2005.

FINANCIAL INCOME/(EXPENSES), NET

Interest expenses were approximately $209,000 for the year ended December 31, 2006, as compared to the same corresponding period in year 2005 in the amount of $136,000, an increase of $73,000 or 53.7%. The majority of the increase was the result of consolidating the interest expenses incurred by the New Generation during the period from Janauary 1 to September 29, 2006 in relation to an increased bank loan in the amount of approximately RMB12,250,000 (approximately equals US$1.5 million) to RMB31,250,000 (approximately equals to US$3.9 million) immediately before disposal of 60% of our equity holding of GBN and New Generation on September 29, 2006,.

OTHER INCOME AND REALIZED GAIN

The other income and realized gain decreased by approximately $6,032,000 for the year ended December 31, 2006. The decrease was the result of the reduction on disposal of securities during the reporting period which we received as compensation for our consultancy services rendered. These securities may be sold only when earned under the respective consulting agreements, and it is our intention to sell shares earned as promptly as practicable in order to generate income for the company, subject to compliance with federal securities laws.

33

LOSS ON DISPOSAL OF INTEREST IN A SUBSIDIARY

Loss on disposal of interest in a subsidiary recorded at approximately $3,211,000 for the year ended December 31, 2006 compared to a gain of $86,000 none for the same corresponding period in year 2005. The loss resulted from the disposal of 60% of our equity holdings in our subsidiary GBN, which is the holding company of New Generation.

IMPAIRMENT LOSS ON INVESTMENT IN AN AFFILIATE

Impairment loss on investment in an affiliate was recorded at approximately $2,140,000 for the year ended December 31, 2006 compared to none for the same corresponding period in year 2005. The loss resulted from the difference between the investment cost and the carrying value on our disposed affiliate.

LOSS ON DISPOSAL OF LEASEHOLD LAND AND BUILDING

The loss on disposal of leasehold land and building decreased by approximately $246,000 to $9,000 for the year ended December 31, 2006, as compared to approximately $255,000 for the same corresponding period in year 2005. The decrease in loss was primarily due to that there is no payment of PRC tax and levy resulting from the disposal of our Guangzhou property for the year ended December 31, 2006, which occurred only for the year ended December 31, 2005.

INCOME TAXES

The Group is subject to income taxes on an equity basis on income arising in or derived from the tax jurisdiction in which it is domiciled and operates.

The Hong Kong subsidiaries incurred losses for taxation purposes for the period and thus Hong Kong Profits Tax has not been provided.

Several of our PRC subsidiaries are subject to PRC Enterprise Income Taxes (“EIT”) on an entity basis on income arising in and derived from the PRC. The applicable EIT rate is 33%.

Income taxes were $103,000 for the year end December 31, 2006, as compared to US$254,000 for the same corresponding period in year 2005. The decrease of income taxes was mainly from the operation of New Generation.

NET LOSS

Net loss was approximately $10,091,000 for the year ended December 31, 2006, as compared to the same corresponding period in year 2005, a decrease of $10,108,000 or 56,155.6% from a profit of $18,000. The increase in net loss was the result of the recognition of the impairment loss on disposal of interest in a subsidiary and the impairment loss on investment in an affiliate. The loss was also the result of the decrease of net gain from the disposal of securities which were received for compensation of our consultancy services. Management believes that our operations will continue to improve and we do not foresee a trend of losses.

34

LIQUIDITY AND CAPITAL RESOURCES

Upon disposal of 60% of our equity interest in our former subsidiary, General Business Network (Holdings) Ltd. (“GBN”), on September 29, 2006, we no longer had any banking facilities and outstanding lines of credit as of December 31, 2006.

However, during the nine months period from January 1 to September 29, 2006, we had banking facilities, through our former subsidiary New Generation Commercial Management Ltd., granted in the total amount of approximately $4.2 million, of which approximately $3.9 million had been utilized as of September 29, 2006. These facilities relate to $4.2 million in a short term loan with pledged deposits of $247,000. The weighted average interest rate for these facilities is about 6.635% per annum. These banking facilities, related to a bank loan and pledged deposit and have been disposed indirectly upon the disposal of GBN on September 29, 2006 as mentioned above.

As of December 31, 2006, cash and cash equivalents totaled $107,144. This cash position was the result of a combination of net cash provided by financing activities in the amount of $3,087,415, offsetting by net cash used in investing activities in the amount of $1,875,448 and the net cash used in operating activities in the amount of $4,339,686. The increase in financing activities was mainly due to the increase in the proceeds of additional bank loan of $2,037,716, offsetting by a repayment of $524,866 during the 9 months period from January 1 to September 29, 2006, through our previous subsidiary New Generation, and the advance from a shareholder of $1,529,565. The net cash used in investing activities was mainly due to the disposal of a subsidiary of $1,253,749, acquisition of a subsidiary amount to $394,641 and the acquisition of property, plant and equipment of $406,267. The net cash used in operating activities was mainly the result from the net loss of $10,090,975, increase in account receivables of $1,002,201 and increase in due from related companies of $1,156,351 offsetting by loss on disposal of a subsidiary $3,210,538 and impairment loss on investment in an affiliate $2,140,359; and the stock, option and warrants issued for services amount to $1,391,977.

We believe that the level of financial resources is a significant factor for our future development and accordingly may choose at any time to raise capital through private debt or equity financing to strengthen its financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities.

The Company has taken the position that its earlier filing with the Commission of a Registration Statement on Form SB-2 covering the proposed sale in a secondary offering of $30.0 million of Registrable Securities pursuant to a Standby Equity Distribution Agreement, and the proposed sale of other securities pursuant to a Securities Purchase Agreement dated August 26, 2004, has been terminated as a result of the failure of such registration statement to be declared effective by the Commission after the filing of a sixth and final amendment on February 3, 2006. We do not have immediate plans to have a public offering of our common stock.

OTHER SIGNIFICANT EVENTS

On September 29, 2006, the Company through its wholly owned subsidiary, China Chance Enterprises Limited, sold 100% outstanding capital stock of Rejoice Success Limited (“Rejoice”) to Wisdom Plus Limited (“Wisdom Plus”) at a consideration of $4,000,000. Rejoice owns 60% of the outstanding capital stock of General Business Network (Holdings) Limited (“GBN”), which indirectly owns 51% of the outstanding capital stock of New Generation Commercial Management Limited (“New Generation”).

35

New Generation engages in the travel agency business by operating ten subsidiaries in Southern China. To date, New Generation has accumulated a substantial market share in ticketing sales for international and domestic flights as well as inbound business travel. In addition, Guangzhou Huahao Insurance Agency Limited, one of the New Generation group of companies, is also a licensed insurance agent in China, providing accidental and life insurance to individual policy holders in the Guangzhou Province of China.

The purchase price will be paid by 4 installments from September 30, 2006 to July 29, 2007 in cash or shares of common stock issued by any Pink Sheet companies or OTCBB companies in lieu of the consideration. The amount of share certificates shall be agreed by both parties in a separate agreement.

While cash of US$100,000 had been received as of December 31, 2006, the second payment of cash of $900,000 was received on February 8, 2007 in accordance with the Agreement with the following schedules: US$100,000 to be paid on September 30, 2006; US$900,000 to be paid on January 29, 2007; US$1,000,000 to be paid on April 29, 2007; and US$2,000,000 to be paid on July 29, 2007.As of the date of issuance of this report, total cash of US$1,000,000 had been duly received in accordance with the Agreement.

On September 25, 2006, the Company together with its wholly owned subsidiary, Rainbow Wish Limited (“Rainbow Wish”), entered into a Share Exchange Agreement (the “Agreement”) with CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty percent (60%) of the capital stock of CWT Excursion, and also a citizen and resident of the People’s Republic of China. Pursuant to the terms of the Agreement, the Company will issue 9,000,000 shares of its common stock (the “CWTD Shares”) to Mr. Tsang in exchange for 25 common shares of CWT Excursion owned by him (the “CWT Excursion Shares”) to Rainbow Wish, presenting a 25% equity interest in CWT Excursion.

CWT Excursion was incorporated on March 22, 2006, and is the owner of 51% of the equity interest in a joint venture company known as Suzhou Tongli (International) Excursion Development Limited, which is a company organized and existing under the laws of the People’s Republic of China (“Suzhou Tongli”). Suzhou Tongli is in the business of operating tourist concessions in Tongli Town, Suzhou City, Jiangsu Province, People’s Republic of China.

Pursuant to the Agreement, Mr. Tsang has also agreed to grant Rainbow Wish the option to purchase an additional 35% of the capital stock of CWT Excursion within twelve months of the date hereof, at a price that will be agreed upon by both parties at the time of exercise of said option in a separate agreement.

The acquisition consideration of CWT Excursion amounts to $6,408,000. It is the fair market value of the CWTD Shares to be issued to Mr. Tsang, based on the closing bid price for the common stock of CWTD in the last five trading days preceding the date of the Agreement of $0.712.

CRITICAL ACCOUNTING POLICIES

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavourable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

36

Valuation of long-lived assets

We review our long-lived assets for impairment, including property, plant and equipment, and identifiable intangibles with definite lives, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of our long-lived assets, we evaluate the probability that future undiscounted net cash flows will be greater than the carrying amount of our assets. Impairment is measured based on the difference between the carrying amount of our assets and their estimated fair value.

Allowance for Doubtful Accounts

We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. We continuously monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that we will continue to experience credit loss rates similar to those we have experienced in the past. Measurement of such losses requires consideration of historical loss experience, including the need to adjust for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates and financial health of specific customers.

Goodwill on consolidation

Our long-lived assets include goodwill. SFAS No. 142 "Goodwill and Other Intangible Assets" requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests in certain circumstances. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

37

Item 7. Financial Statements

The information required by this Item is located following the signature page and exhibits of this annual report.

CHINA WORLD TRADE CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Child, Van Wagoner & Bradshaw, PLLC, Independent Registered Public Accounting Firm	39
Consolidated Balance Sheet	40
Consolidated Statements of Operations and Comprehensive Income (Loss)	41
Consolidated Statements of Changes in Shareholders’ Equity	42
Consolidated Statements of Cash Flows	43
Notes to Consolidated Financial Statements	44

38

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

China World Trade Corporation

We have audited the accompanying consolidated balance sheet of China World Trade Corporation and subsidiaries as of December 31, 2006, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years ending December 31, 2006 and 2005. These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide

a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of China World Trade Corporation and subsidiaries as of December 31, 2006, and the results of their operations and their cash flows for the years ending December 31, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations during the year, despite having a positive working capital, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Child, Van Wagoner & Bradshaw, PLLC

Child, Van Wagoner & Bradshaw, PLLC

Certified Public Accountants

Salt Lake City, Utah, USA

April 16, 2007

39

CHINA WORLD TRADE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Expressed in United States Dollar (“US$”), except for per share data)
			December 31, 2006
ASSETS	Note
Current assets:
Cash and cash equivalents			$	107,144
Accounts receivable, net		8		6,160
Prepayments				250,648
Other current assets				28,586
Disposal consideration receivable		10		3,900,000
Rental and other deposits		9		255,314
Due from affiliate company		11 (c)		25,163
Total Current Assets				4,573,015
Property, Plant and Equipment:
Property, plant and equipment, net		15		65,714
Investment in affiliate companies		6		8,894,492
Total Assets			$	13,533,221
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	12,412
Accrued expenses				625,518
Due to a shareholder		19		1,679,225
Due to related companies		11 (e)		51,282
Deferred income				5,096
Other current liabilities				148,782
Total Current Liabilities				2,522,315
Total Liabilities				2,522,315
Minority interest in consolidated subsidiaries				17,606
Commitments and contingencies (Note 29)
STOCKHOLDERS’ EQUITY
Preferred stock, par value of US$0.001;
10,000,000 shares authorized, none issued or outstanding				-
Common stock, par value of US$0.001; 50,000,000 shares authorized, 43,865,923 shares issued and outstanding as of December 31, 2006		22		43,866
Additional paid-in capital				39,054,982
Statutory reserves				-
Accumulated other comprehensive income				59,462
Accumulated deficit				(28,165,010	)
Total Stockholders’ Equity				10,993,300
Total Liabilities and Stockholders’ Equity			$	13,533,221

See accompanying notes to consolidated financial statements.

40

CHINA WORLD TRADE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in United States Dollar (“US$”), except for per share data)
			Year Ended
			December 31
	Note		2006			2005
Operating revenues
Club and business centre		2 (k)	$	712,368		$	894,550
Business traveling services				2,689,139			4,983,468
Business value-added services				927,445			1,618,413
Rental				10,385			221,699
Trading and others				0			121,094
				4,339,337			7,839,224
Operating costs and expenses
Club and business centre				(37,118	)		(159,742	)
Business traveling services				(522,610	)		(727,089	)
Business value-added services				(252	)		(2,513,523	)
Rental				-			(98,762	)
Trading and others				-			(119,767	)
				(559,980	)		(3,618,883	)
GROSS PROFIT				3,779,357			4,220,341
Other expenses
Depreciation and amortization				(274,439	)		(303,797	)
Bad debts				(28,217	)		-
Impairment losses on current assets				(44,136	)		-
Impairment of property, plant and equipment				-			(38,598	)
Selling, general and administrative expenses				(8,041,684	)		(9,167,728	)
				(8,388,476	)		(9,510,123	)
Loss from operations				(4,609,119	)		(5,289,782	)
Non-operating income (expense)
Other income				44,735			42,581
Interest income				37,751			28,171
Interest expense				(209,099	)		(136,426	)
Equity in earnings of affiliates				(180,175	)		-
Impairment loss on investment in an affiliate		5		(2,140,359	)		-
Gain (loss) on disposal of interest in a subsidiary		4		(3,210,538	)		85,854
Loss on disposal of dormant subsidiaries				(321,185	)		-
Realized gain on disposal of available-for-sale securities				46,000			6,079,960
Loss on disposal of property, plant and equipment				(9,395	)		(254,740	)
Profit/(loss) before income tax and minority interests				(10,551,384	)		555,618
Income tax expense		7		(103,037	)		(254,419	)
Profit/(loss) before minority interests				(10,654,421	)		301,199
Minority interests				563,446			(282,975	)
Net income/(loss)			$	(10,090,975	)	$	18,224
Per share data:				(10,090,975	)		18,224
Earnings (loss) per share
Basic		2(v)		(0.29	)		0.00
Diluted		2(v)		(0.29	)		0.00
Weighted average number of shares outstanding
Basic				35,252,090			31,154,526
Diluted				35,252,090			31,154,526
Net income/(loss)			$	(10,090,975	)	$	18,224
Other comprehensive income (loss):
Unrealized gains on available-for-sale securities
Unrealized holding gain (loss) arising during the year				(1,108,375	)		751,250
Less:Reclassification adjustment for gains or losses included in net profit (loss)				357,125
Foreign currency translation adjustments				35,472			23,990
Comprehensive income (loss)			$	(10,806,753	)	$	793,464

See accompanying notes to consolidated financial statements.

41

CHINA WORLD TRADE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY (Expressed in United States Dollar (“US$”), except per share data)
				Common stock
	Note			No. of shares		Amount issued		Additional paid in capital			Accumulated other comprehensive income (loss)			Statutory reserves			Accumulated deficit			Total
Balance as of January 1, 2005					30,889,997		30,890		30,817,729			-			44,403			(17,964,755	)		12,928,267
Common stock issued in exchange for consultancy services on April 19, 2005					100,000		100		199,900			-			-			-			200,000
Exercise of warrants on December 2, 2005					2,429,448		2,429		(2,429	)		-			-			-			-
Exercise of options of The 2003 Plan on December 29, 2005					249,478		250		(251	)		-			-			-			(1	)
Net profit					-		-		-			-			-			18,224			18,224
Transfer to statutory reserve															125,221			(125,221	)		-
Foreign currency translation adjustment					-		-		-			23,990			-			-			23,990
Unrealized gain on available-for-sale securities					-		-		-			751,250			-			-			751,250
Balance as of December 31, 2005					33,668,923		33,669		31,014,949			775,240			169,624			(18,071,752	)		13,921,730
Common stock issued for service on April 27, 2006		22(a	)		280,000		280		383,320			-			-			-			383,600
Common stock issued for service on April 27, 2006		22(b	)		117,000		117		162,513			-			-			-			162,630
Common stock issued for service on August 15, 2006		22(c	)		800,000		800		1,095,200			-			-			-			1,096,000
Common stock issued as consideration for acquisition of an affiliate on November 20, 2006		22(d	)		9,000,000		9,000		6,399,000			-			-			-			6,408,000
Net loss					-		-		-			-			-			(10,090,975	)		(10,090,975	)
Transfer to statutory reserve					-		-		-			-			2,283			(2,283	)		-
Foreign currency translation adjustment					-		-		-			35,472			-			-			35,472
Unrealized gain on available-for-sale securities					-		-		-			-			-			-
Unrealized holding (loss) gain arising during the year					-		-		-			(1,108,375	)		-			-			(1,108,375	)
Less: Reclassification adjustment for gains or losses included in net profit (loss)					-		-		-			357,125			-			-			357,125
Adjustment on disposal of a subsidiary		(1	)		-		-		-			-			(171,907	)		-			(171,907	)
Balance as of December 31, 2006					43,865,923		43,866		39,054,982			59,462			-			(28,165,010	)		10,993,300

Notes:

(1)Being adjustment on Statutory Reserves upon disposal of General Business Network (Holdings) Limited on September 29, 2006 as detailed in Note 4 below;

See accompanying notes to consolidated financial statements.

42

CHINA WORLD TRADE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in United States Dollar (“US$”))
	For the Year Ended
	December 31,
	2006			2005
				Restated
Cash flows from operating activities
Net income (loss)	$	(10,090,975	)	$	18,224
Adjustments to reconcile net loss to net cash used in operating activities:
Minority interest		(563,446	)		282,975
Amortization on intangible asset		-			90,000
Depreciation and amortization		274,439			303,797
Bad debts		28,217			-
Loss on sale of land and building		-			25,676
Loss on sale of motor vehicle		9,395			-
Loss on disposal of dormant subsidiaries		321,185			-
Loss (gain) on disposal of a subsidiary		3,210,538			(85,854	)
Impairment loss on investment in an affiliate		2,140,359			-
Equity in earnings of affiliates		180,175			-
Impairment loss on property, plant and equipment		-			38,598
Impairment loss on current assets		44,136			105,799
Stock, options and warrants issued for services		1,391,977			232,500
Realized gain on available-for-sale securities		(46,000	)		(6,079,960	)
Available for sale securities received as income		(375,000	)		(1,042,043	)
Changes in working capital:
Pledged deposit		165,487			(412,484	)
Accounts receivables		(1,002,201	)		(1,913,350	)
Other current assets		(173,805	)		(189,583	)
Loans receivable		406,830			(410,946	)
Due from related parties		(72	)		109,037
Due from related companies		(1,156,351	)		237,791
Due from an affiliate		(25,163	)		-
Rental and other deposits		204,924			(721,732	)
Prepayments		(687,785	)		(201,525	)
Inventories		-			136,112
Hire purchase creditor		71,031			50,000
Account payables		814,614			703,764
Accrued expenses		162,432			258,939
Decrease in deferred income		(985	)		(20,642	)
Other current liabilities		294,879			33,710
Due to related parties		2,470			(58,317	)
Due to related companies		(26,296	)		51,494
Income tax payable		49,833			205,952
Net cash provided from (used in) operating activities		(4,375,158	)		(8,252,068	)
Cash flows from investing activities:
Acquisition of a subsidiary		(394,641	)		(92,327	)
Acquisition of property, plant and equipment		(406,267	)		(508,153	)
Disposal of a subsidiary		(1,253,749	)		(272,477	)
Disposal of dormant subsidiaries		4			-
Proceeds from disposal of property, plant and equipment		33,205			2,457,382
Proceeds from disposal of short-term investment		-			24,163
Proceeds from disposal of available-for-sale securities		146,000			6,838,178
Proceeds from disposal of intangible asset		-			1,320,000
Acquisition of available-for-sale securities		-			(3,675	)
Net cash used in investing activities		(1,875,448	)		9,763,091
Cash flows from financing activities:
Advance from (Repayment to) a shareholder		1,529,565			(183,405	)
Proceeds from new bank loan		2,037,716			1,111,482
Repayment of amount borrowed		(524,866	)		(1,052,495	)
Capital contribution from minority shareholder of a subsidiary		45,000			-
Net cash provided by financing activities		3,087,415			(124,418	)
Foreign currency translation adjustments		35,472			23,990
Net increase in cash and cash equivalents		(3,127,719	)		1,410,595
Cash and cash equivalents at beginning of year		3,234,863			1,824,268
Cash and cash equivalents at end of year	$	107,144			3,234,863
Supplemental disclosure information:
Interest paid	$	210,418		$	138,757
Income tax paid	$	103,037		$	52,108
Non-cash operating, investing and financing activities:
Purchase of an affiliate by:
- issuance of common stock	$	6,408,000		$	-
Disposal of a subsidiary by:
- disposal consideration in arrears	$	3,900,000		$	225,644

See accompanying notes to consolidated financial statements.

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1.ORGANIZATION AND DESCRIPTION OF BUSINESS

China World Trade Corporation (“CWTC”) was incorporated under the laws of the State of Nevada on January 29, 1998 as Weston International Development Corporation. On July 28, 1998, the name was changed to Txon International Development Corporation. On September 15, 2000 CWTC changed to its existing name. CWTC acts as an investment holding company, not an investment company.

The Company and subsidiaries are hereinafter collectively referred to as the “Group”.

Details of the major direct and indirectly owned subsidiaries and their principal activities as of the date of this report are summarized below:

Name of company	Date of acquisition/ formation	Place of incorporation	Equity interest owned by the Company	Principal activities
Beijing World Trade Centre Club	April 1, 1999	PRC	75%	Club services
Beijing World Trade Full Capital Advisors Inc.	December 9, 2005	PRC	55%	Business consulting service
CEO Clubs China Limited	May 7, 2004	Hong Kong	51%	Licensing
China Chance Enterprises Limited	January 26, 2004	BVI	100%	Equity holding company
China World Trade Corporation	May 5, 2004	BVI	100%	Equity holding company
Creative Idea Group Limited	January 2, 2004	BVI	100%	Business consulting service
Guangzhou World Trade Centre Club Limited	December 29, 2001	PRC	75%	Club services
June Success Limited	August 17, 2006	BVI	100%	Equity holding company
Rainbow Wish Limited	August 17, 2006	BVI	100%	Equity holding company
Sinopac Success Limited	August 17, 2006	BVI	100%	Equity holding company
Virtual Edge Limited	August 14, 2000	BVI	100%	Equity holding company

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2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of consolidation

These accompanying consolidated financial statements include the financial statements of CWTC and subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The results of subsidiaries acquired or disposed of during the year are consolidated from or up to the date of their effective dates of acquisition or disposal, respectively.

The Company's subsidiaries maintain their books  and records mainly in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which its operations are conducted.

In accordance with statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", they are translated into US dollars as follows:

(a) Current assets, current liabilities and long term monetary assets and liabilities, at the exchange rate prevailing at the balance sheet date;

(b) Non-monetary assets and liabilities at the exchange rates prevailing at the date of acquisition of assets or assumption of liabilities;

(c) Revenue and expenses, at the average exchange rate for the year.

All significant inter-company balances and transactions have been eliminated in consolidation.

Certain of the 2005 figures in consolidated statements of cash flows have been restated to conform with the presentation adopted in 2006. Net income and stockholders' equity previously reported for the year ended December 31, 2005 were not affected by these reclassifications.

(b)Use of estimates

The preparation of consolidated financial statements requires management of the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c)Cash and cash equivalents

Cash and cash equivalents of US$107,144 as of December 31, 2006 consist principally of cash at bank. For purposes of the consolidated statements of cash flows, the Group considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. None of the Group’s cash is restricted as to withdrawal, which if any, has been separately disclosed in current assets.

(d)Accounts receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Group’s best estimate of the amount of probable credit losses in the Group’s existing accounts receivable. The Group determines the allowance based on historical write-off experience of the Group. The Group reviews its allowance for doubtful accounts on a regular basis. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. All other balances are reviewed on a pooled basis by industry. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers.

(e)Property-use rights

Property-use rights are stated at cost less accumulated amortization and impairment losses. Costs of the property-use rights are amortized over the term of the relevant rights on a straight line basis.

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(f)Property, plant and equipment

Property, plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

	Depreciable life
Leasehold land and buildings	50 years
Leasehold improvements	2 - 3 years
Office and computer equipment	3 - 5 years
Motor vehicles	3 - 6 years
Furniture and fixtures	3 - 10 years

(g)Goodwill on consolidation

Goodwill represents the excess of the purchase consideration payable in acquisitions of subsidiaries over the fair value of the net assets acquired at the time of acquisition. Goodwill on consolidation is stated at cost when it arises. As part of an ongoing review of the valuation of goodwill, management assesses the carrying value of the goodwill to determine if changes in facts and circumstances suggest that it may be impaired. If this review indicates that the goodwill is not recoverable, the carrying value of the goodwill would be reduced to its estimated fair market value.

On disposal of a subsidiary, any attributable amount of purchased goodwill is included in the calculation of the gain or loss on disposal.

(h)Investment in affiliate companies

The Company accounts for its affiliate companies under the equity method of accounting, by which the Company’s share of income or loss of affiliates are recorded as “Equity in earnings of affiliates” in the consolidated statement of operation. The investment in affiliate companies is included in balance sheet at cost plus equity accounting adjustments which are the Company’s share of losses since acquisition of the affiliates.

(i)Impairment of long-lived assets

In accordance with FASB Statement 144, long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Goodwill is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level and consists of two steps. First, the Group determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB Statement 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

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(j)Deferred income

Deferred income represents unamortized non-refundable admission fees, membership fees and licensing fees received but the related services, or portion of the services, have not yet been rendered.

(k)Revenue recognition

The Group recognizes revenue when persuasive evidence of an arrangement exists, the element has been delivered, the fee is fixed or determinable, collection of the resulting receivable is probable, and VSOE of the fair value of any undelivered element exists. A discussion about these revenue recognition criteria and their applicability to the Group’s transactions as follows:

Persuasive evidence of an arrangement: The Group uses either contract signed by both the customer and the Group or written sales receipt issued by the Group that legally bind the Group and the customer as evidence of an arrangement.

Product delivery: The Group deems delivery to have occurred when the air tickets are accepted by and title and risk of ownership has passed to the customer. Delivery of other services are recognized as services are rendered under the terms of the contract.

Fixed or determinable fee: The Group considers the fee to be fixed or determinable if the fee is not subject to refund or adjustment and the payment terms are within its normal established practices. If the fee is not fixed or determinable, the Group recognizes the revenue as amounts become due and payable.

Collection is deemed probable: The Group conducts a credit review for all significant transactions at the time of the arrangement to determine the credit-worthiness of the customer. Collection is deemed probable if the Group expects that the customer will pay amounts under the arrangement as payments become due.

(i)   Club and business center

The Group, through its Business Club, provides members a commercial and recreational service, education programs and business networking programs. The Group generally records membership revenue as deferred income on its consolidated balance sheets and recognizes it over the membership period. Revenues generated from memberships that are subject to a pro rata refund are recognized ratably over the membership period.

(ii)   Business traveling services

Travel distribution services

The Group engages in the air-ticketing, hotel room booking and travel agency businesses and receives commissions from travel suppliers for air travel, hotel rooms, vacation packages and cruises booked through its toll-free call center, websites and reseller network. Commissions from travel providers are recognized upon delivery of the appropriate confirmation or air ticket to the customers. Commissions from hotel room booking are recognized upon the confirmation of a customer’s stay with the hotel. The Company is not the primary obligor of the arrangement of these services and revenue is reported net in accordance with EITF 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent”.

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For informational purposes, the commission income of the Group was derived from air-ticketing services with total values as follows:

	Year ended December 31
	2006		2005
	US$		US$
Value of air-ticket fare		131,254,359		147,995,206

The 2006 figure above is the 9 months’ total values, as a result of the disposal of the air-ticketing business upon disposal of GBN on September 29, 2006 (please see note 4 for details), as compared with the 12 months’ total values of 2005.

Life and accident insurance agency business

The Group engages in the accident insurance agency business in PRC. Life insurance business ceased effective from January 2006. Commission revenues from the carriers for accident insurance are received and recognized during the underlying policy period.

For informational purposes, the commission income of the Group was derived from insurance policies with total premium income as follows:

	Year ended December 31
	2006		2005
	US$		US$
Premium income of insurance policies		3,533,643		11,892,144

The 2006 figure above is the 9 months’ total values, as a result of the disposal of the air-ticketing business upon disposal of GBN on September 29, 2006 (please see note 4 for details), as compared with the 12 months’ total values of 2005.

(iii)   Business value-added services

Revenues from various business consultancy services contracts are recognized as services are provided. There are two basic types of services contracts: (1) fixed price (or flat fee basis) services contracts and (2) services contracts which may or may not be signed in advance for similar service on a success basis (success fee basis). Fixed price services contracts are generally performed evenly over the contract period, and, accordingly, revenue is recognized on a pro-rata basis over the life of the contract. Revenues derived from other services contracts are recognized when the services are performed in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition, revised and updated.” Expenses related to all services contracts are recognized as incurred.

For fixed price services contracts for which fees are received in the form of marketable securities, revenue is recognized with reference to the fair value of marketable securities as of the vested date. Vested date is taken as the contract date and fair value of the marketable securities is determined by multiplying quantity of shares received by the closing market price as of contract date. Revenue is recognized on a pro-rata basis over the life of the contract.

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(iv)   Rental and others

Rental

The Company also leases business facilities to members of the Club. These leases are classified as operating leases and the lease revenues are recognized based on the lease term of the facilities.

Others

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 101 “Revenue Recognition of Financial Statements”, when the title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the sales price is determinable, and collectibility is reasonably assured.

(v)   Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

(l)Advertising costs

The Group expenses advertising costs as incurred in accordance with the SOP 93-7, “Reporting for Advertising Costs”. Advertising costs are expensed as incurred and were US$274,486 for the year ended December 31, 2006 and US$312,207 for the year ended December 31, 2005.

(m)Income taxes

The Group accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”, which requires the asset and liability approach for financial accounting and reporting for income taxes. Under this approach, deferred income taxes are provided for the estimated future tax effects attributable to temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from loss carry-forwards and provisions, if any. Deferred tax assets and liabilities are measured using the enacted tax rates expected in the years of recovery or reversal and the effect from a change in tax rates is recognized in the statement of operations in the period of enactment. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. For details please refer to Note 7 to these financial statements.

(n)Foreign currency translation

Assets and liabilities of the Group whose functional currency is the local currency are translated into U.S. dollars at exchange rates prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates for the year. The net exchange differences resulting from these translations are reported in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

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(o)   Business segment reporting

SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” establishes standards for reporting information about operating segments on a basis consistent with the Group’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements.

The Group operates in five principal business segments: club and business centre, business traveling services, business value-added services, rental and others. There reportable segments are strategic business units that offer different services. They are managed separately because they provide distinct service that requires different knowledge and marketing strategies.

(p)   Stock-based compensation

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.” Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for public entities (excluding small business issuers) for the fiscal year beginning after June 15, 2005. The Group adopted SFAS No. 123(R) on January 1, 2006 using the modified-prospective transition method. Had the Group adopted SFAS No. 123(R) for the year ended December 31, 2005, its diluted earnings per share would have been unchanged, and going forward, the Group expects that the adoption of SFAS No. 123(R) will have a similar effect on diluted earnings per share.

The Company records compensation expense for stock-based employee compensation plans using the intrinsic value method in which compensation expense, if any, is measured as the excess of the market price of the stock over the exercise price of the award on the measurement date.

On December 31, 2003, the Board of Directors adopted a stock option plan (The 2003 Plan). The 2003 Plan allows the Board of Directors to grant stock options to various employees of the Company. 1,000,000 stock options were granted in accordance with the terms of the 2003 Plan on December 31, 2003 to certain officers and directors at an exercise price of US$0.673 per share. The stock options will vest and become exercisable according to the following schedule:

On April 30, 2004:                                                                 25%

On December 30, 2004:                                                         25%

Each quarter thereafter:                                                         6.25% (until fully vested)

By an ordinary resolution passed at a directors’ meeting held on October 31, 2004, the option holders of The 2003 Plan were allowed to begin exercising 50% of the total entitlements as of November 1, 2005 (ahead of the original entitlement on December 30, 2004) and on a cashless basis. The terms and conditions of the remaining 50% of their entitlements under The 2003 Plan shall stay the same.

As the exercise price of the Company’s incentive stock options is higher than the market price of the underlying stock on the date of grant, pursuant to APB Opinion No. 25, no compensation expense has been recognized for stock options granted to employees at the date of grant. Following modification the options granted under The 2003 Plan, the modified award (i.e. 50% of the total entitlements) was fully vested at October 31, 2004. The new measurement of stock-based compensation was required and based on the intrinsic value of the Company’s common stock at the date immediately prior to the modification (i.e. October 31, 2004). The compensation cost was recognized in the consolidated statement of operations and the same amount was credited to the Company’s additional paid-in capital.

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Had compensation expense for the same stock options been determined based on their fair values at the dates of grant and been amortized over the period from the date of grant to the date that the award is vested, as consistent with the provisions of SFAS No. 123, the Company's net loss and loss per share would have been reported as follows:

	Year ended December 31
	2006			2005
Net profit (loss), as reported		(10,090,975	)		18,224
Total stock-based employee compensation expense determined under intrinsic value based on method for all awards, net of tax		Nil			Nil
Total stock-based employee compensation expense determined under fair value based on method for all awards, net of tax		Nil			Nil
Pro forma		(10,090,975	)		18,224
Earning (loss) per share
- Basic and diluted
As reported		0.00			0.00
Pro forma		0.00			0.00

The fair value of the options granted is estimated on the date of grant and date of modification using a Black-Scholes option pricing model with the following weighted average assumptions used:

		Years ended December 31,
		2006			2005
Dividend yield		-			-
Expected price volatility		224	%		224	%
Risk-free interest rate		2.1	%		2.1	%
Expected life of options (in years)		3			3
Weighted-average fair value of options granted or modified	$	0.62		$	0.62

The weighted average fair value per option granted at the date of grant and date of modification was US$0.62 and US$1.97 respectively. For purposes of pro forma disclosure, the estimated fair value of the options is amortized on a straight line basis to expense over the options’ vesting periods, i.e., 3 years as prescribed under The 2003 Plan.

(q)   Comprehensive income (loss)

Accumulated comprehensive income, as presented in the accompanying consolidated statement of shareholders' equity consists of changes in unrealized gains and losses on foreign currency translation as well as unrealized gains or losses from available-for-sale securities. This comprehensive income is not included in the computation of income tax expense or benefit.

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(r)   Related party

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the party in making financial and operating decisions or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. All material related party transactions have been disclosed in the disclosure note 15 to the financial statements.

(s)   Concentrations of credit risk

Financial instruments that potentially subject the Group to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Group performs ongoing credit evaluations of its customers' financial condition, but does not require collateral to support such receivables.

The Group utilizes a limited number of suppliers for certain components used in its products but has no long-term supply contracts with them.

(t)   Fair value of financial instruments

Management considers that the carrying amounts of the Group’s cash, receivables, and payables approximate their fair value because of the short maturity of these instruments. Amounts due to related companies do not bear interest and do not have fixed payment terms. Management is therefore unable to estimate the fair value of such financial instruments.

(u)Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Rent payable and receivable under operating leases are recognized as expense and revenue on the straight line basis over the lease terms.

The Company leases certain premises under non-cancellable operating leases. Rental expenses under operating leases were US$551,387 and US$690,283 for the years ended December 31, 2006 and 2005, respectively.

(v)Earnings per share

The Company computes earnings per common share (“EPS”) in accordance with SFAS No. 128, “Earnings per Share.” Basic earnings per common share (“Basic EPS”) are calculated using the weighted average number of shares of common stock outstanding during each period. Diluted earnings per common share (“Diluted EPS”) reflect the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, deferred compensation, restricted stock units, and the outstanding commitment to issue shares under the Employee Stock Purchase Plan, determined by the treasury stock method.

As of December 31, 2006, the Company had outstanding stock warrants and options which exercise on conversion could, under certain circumstances, further dilute loss per share. The following shares of potentially issuable common stock were not included in the above weighted average shares outstanding because to do so would have an anti-dilutive effect on loss per share for the year presented.

	As of December 31
	2006		2005
Warrants		921,002		921,002
Options		1,400,000		1,400,000
		2,321,002		2,321,002

2005 figure is restated to conform with current year’s presentation.

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(w)Available-for-sale securities

Available-for-sale securities received in respect of the services rendered in our business value-added segment are accounted for as a current asset for non-legend free trading shares, at fair value as of the vested date. Vested date refers to the contract date which the Company is entitled to the receipt of the shares in respect of its services rendered pursuant to the consultancy service engagement contract. Fair value is taken as the number of shares multiplied by the closing market price of the marketable securities received. For those restricted shares, it is accounted for as a non-current asset upon receipt of securities. For those available-for-sale securities still on hand as of year-end or quarter-end date, amounts are stated at fair value as of the reporting date. They will be “marked to market” by multiplying the number of shares on hand by the closing market price as of the reporting date. The change in unrealized gain or loss will be directly adjusted to accumulated other comprehensive income - unrealized gain on available-for-sale securities.

Please refer to footnote 2(k)(iii) for method of revenue recognition in respect of the consultancy income relating to the receipt of available-for-sale securities. Realized gain on sale of available-for-sale securities is calculated by deducting fair value of shares disposed (number of shares disposed multiplied by market price as of vested date) from net proceeds on disposal (which selling expenses including brokerage commission and levies have been deducted).

(x)Recently Issued Accounting Standards

In February 2006, the FASB issued SFAS Statement No. 155, “Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140” ("SFAS 155"). This Statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.” This Statement permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives and amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 is effective for all financial instruments acquired or issued for the Group for fiscal year begins after September 15, 2006. The Group is currently evaluating the impact of SFAS 155 on its financial statements.

In March 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 156 (“SFAS 156”), Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140, which requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract under certain circumstances. The Company does not expect the adoption of FIN 48 to materially impact its financial position or results of operations.

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company does not expect the adoption of FIN 48 to materially impact its financial position or results of operations.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), Fair Value Measurements. SFAS 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of SFAS 157 to materially impact its financial position or results of operations.

In September 2006, the SEC released SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides interpretive guidance on the SEC’s views on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The provision of SAB 108 is effective for the Company in the current fiscal year ended December 31, 2006. The Company is currently evaluating the impact of SAB 108 but does not believe that the application of SAB 108 would have a material effect on its financial position, cash flows nor results of operations.

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company has not determined the affect of adopting this standard.

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3. GOING CONCERN CONSIDERATIONS

Though the Company has a positive working capital of US$2,050,700 as of December 31, 2006, the Company had net loss of US$10,090,975 and net profit of US$18,224 for the years ended December 31, 2006 and 2005 respectively.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital through additional equity funding and attaining profitable operations in the future. Management has developed a strategy, which they believe can be accomplished and will enable the Company to operate in the future. However, there can be no assurance that the Company will be successful with their efforts to attain profitable operations. The inability of the Company to secure additional financing and attain profitable operations in the near term could adversely impact the Company’s business, financial position and prospects.

4. DISPOSAL OF A SUBSIDIARY

On September 29, 2006, the Company through its wholly owned subsidiary, China Chance Enterprises Limited, sold 100% outstanding capital stock of Rejoice Success Limited (“Rejoice”) to Wisdom Plus Limited (“Wisdom Plus”) at a consideration of $4,000,000. Rejoice owns 60% of the outstanding capital stock of General Business Network (Holdings) Limited (“GBN”), which indirectly owns 51% of the outstanding capital stock of New Generation Commercial Management Limited (“New Generation”).

New Generation engages in the travel agency business by operating ten subsidiaries in Southern China. To date, New Generation has accumulated a substantial market share in ticketing sales for international and domestic flights as well as inbound business travel. In addition, Guangzhou Huahao Insurance Agency Limited, one of the New Generation group of companies, is also a licensed insurance agent in China, providing accidental and life insurance to individual policy holders in the Guangzhou Province of China.

The purchase price will be paid by 4 instalments from September 30, 2006 to July 29, 2007 in cash or shares of common stock issued by any Pink Sheet companies or OTCBB companies in lieu of the consideration. The amount of share certificates shall be agreed by both parties in a separate agreement.

While cash of US$100,000 had been received as of December 31, 2006, second payment of cash of $900,000 was received on February 8, 2007 in accordance with the Agreement with the following schedules: US$100,000 to be paid on September 30, 2006; US$900,000 to be paid on January 29, 2007; US$1,000,000 to be paid on April 29, 2007; and US$2,000,000 to be paid on July 29, 2007.As of the date of issuance of this report, total cash of US$1,000,000 had been duly received in accordance with the Agreement.

54

Loss on disposal of GBN is determined as follows:

	Year ended December 31, 2006
	US$
Net Assets disposed
Property, plant and equipment		1,488,347
Goodwill		11,409,514
Rental use rights		1,543,413
Cash and cash equivalents		1,353,749
Pledged bank deposit		246,996
Account receivables		4,386,375
Available-for-sale securities		159,375
Due from a related company		1,157,343
Due from related parties		614,255
Due from a director		8,265
Rental and other deposits		1,992,209
Prepayments		918,818
Loan receivable		4,116
Other current assets		515,215
Lines of credit		(3,859,311	)
Due to related parties		(30,116	)
Accounts payable		(3,957,938	)
Accruals		(181,952	)
Tax payables		(1,472,141	)
Tax penalty		(1,026,680	)
Hire purchase creditor		(121,032	)
Other current liabilities		(1,440,673	)
Minority interest		(1,690,583	)
Net asset value		12,017,564
60% thereof		7,210,538
Consideration		4,000,000
Loss on disposal of a subsidiary		3,210,538

55

5.IMPAIRMENT LOSS ON AFFILIATE

Upon disposal of 60% of General Business Network (Holdings) Limited (“GBN”) common shares per note 4 above, the Company holds 40% of its outstanding capital stock. GBN becomes an affiliate subsequent to the disposal. With reference to the consideration relating to 60% of equity of GBN which has been disposed, the impairment loss is determined as follows:

	Year ended December 31, 2006
	US$
Cost of investment of GBN (40% of net asset value $12,017,564 immediately before disposal)		4,807,026
Carrying value of GBN with reference to consideration for 60% equity disposed of ($4,000,000 x 40%/60%)		2,666,667
Impairment loss		2,140,359

6. INVESTMENT IN AFFILIATES

The Company accounts for its 25% interest in CWT International Excursion Investment Limited (“CWT Excursion”), a company organized and existing under the laws of the British Virgin Islands, and 40% interest in General Business Network (Holdings) Limited (“GBN”), a company organized and existing under the laws of Hong Kong SAR, under the equity method of accounting. Under the equity method of accounting, the Company’s share of income or loss of CWT Excursion and GBN are recorded as “Equity in earnings of affiliates” in the consolidated statement of operation. Equity in earnings of both affiliates have been accounted for in the statement of operation for year ended December 31, 2006.

Carrying value of affiliates consists of the following:

	As of December 31, 2006
	US $
General Business Network (Holdings) Limited.
Carrying value with reference to consideration for 60% equity disposed ($4,000,000 x 40%/60%)		2,666,667
Equity in earnings of GBN		(128,138	)
Cash dividend received from GBN		--
		2,538,529
CWT International Excursion Investment Limited
Carrying value with reference to closing bid price for the 9,000,000 common stock of the Company issued as consideration in the last five trading days preceding the date of the Agreement of $0.712 ($0.712 x 6,000,000 shares)		6,408,000
Equity in earnings of CWT Excursion		(52,037	)
Cash dividend received from CWT Excursion		--
		6,355,963
Carrying value in affiliates		8,894,492

56

(a)   Acquisition of affiliate

On September 25, 2006, the Company together with its wholly owned subsidiary, Rainbow Wish Limited (“Rainbow Wish”), entered into a Share Exchange Agreement (the “Agreement”) with CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty percent (60%) of the capital stock of CWT Excursion, and also a citizen and resident of the People’s Republic of China. Pursuant to the terms of the Agreement, the Company will issue 9,000,000 shares of its common stock (the “CWTD Shares”) to Mr. Tsang in exchange for 25 common shares of CWT Excursion owned by him (the “CWT Excursion Shares”) to Rainbow Wish, presenting a 25% equity interest in CWT Excursion.

CWT Excursion was incorporated on March 22, 2006, and is the owner of 51% of the equity interest in a joint venture company known as Suzhou Tongli (International) Excursion Development Limited, which is a company organized and existing under the laws of the People’s Republic of China (“Suzhou Tongli”). Suzhou Tongli is in the business of operating tourist concessions in Tongli Town, Suzhou City, Jiangsu Province, People’s Republic of China.

Pursuant to the Agreement, Mr. Tsang has also agreed to grant Rainbow Wish the option to purchase an additional 35% of the capital stock of CWT Excursion within twelve months of the date hereof, at a price that will be agreed upon by both parties at the time of exercise of said option in a separate agreement.

The acquisition consideration of CWT Excursion amounts to $6,408,000. It is the fair market value of the CWTD Shares to be issued to Mr. Tsang, based on the closing bid price for the common stock of CWTD in the last five trading days preceding the date of the Agreement of $0.712.

The investment in CWT Excusion is categorized as an affiliate because the Company owns 25% of its equity, which is 20% or more and is 50% or less of its outstanding capital stock. It is included in the consolidated income statement using the equity method of accounting and is included in balance sheet at cost plus equity accounting adjustments.

(b)   Addition of affiliate

Upon disposal of 60% of General Business Network (Holdings) Limited (“GBN”) common shares per note 4 above, the Company holds 40% of its outstanding capital stock. GBN becomes an affiliate subsequent to the disposal.

7.INCOME TAXES

The Group are subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which it is domiciled and operated.

The Hong Kong subsidiaries incurred losses for taxation purposes for the year and thus Hong Kong Profits Tax has not been provided.

Several PRC subsidiaries are subject to PRC Enterprise Income Taxes (“EIT”) on an entity basis on income arising in or derived from the PRC. Income tax expense comprises of the following:

	Year ended December 31,
	2006		2005
Current tax		103,037		254,419
Deferred tax		-		-
-		103,037		254,419

57

A reconciliation of the income tax expense to the amount computed by applying the current tax rate to the income before income taxes in the consolidated statements of income is as follows:

	Year ended December 31,
	2006			2005
	%			%
Statutory rate		33.0			33.0
Non-deductible expenses		5.9			211.5
Tax exempt income		-			(18.6	)
Tax effect of net operating losses		(41.9	)		4,123.8
Unrecognised temporary differences		2.9			831.4
Subsidiary not subject to tax		(0.8	)		(5,022.6	)
Tax rate differential between subsidiaries		(0.1	)		569.6
Over provision in prior years related to a newly-acquired subsidiary		-			-
Others		-			668.0
		(1.0	)		1,396.1

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Group’s deferred tax assets and liabilities are as follows:

;                                           As of December 31
	2006			2005
Deferred tax assets
Net operating loss		4,802,923			8,500,133
Depreciation		51,041			101,462
Deferred expenditure		638,148			2,952,336
		5,492,112			11,553,931
Valuation allowance		(5,492,112	)		(11,553,931	)
Total deferred tax assets		-			-

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

58

8. TRADE RECEIVABLES, NET

	As of December 31, 2006
	US$
Trade receivables, net		6,160

Provision of bad and doubtful debts amounting to US$28,217 has been made in these consolidated financial statements. Management considers that the accounts receivable after provision for bad and doubtful debts are stated at fair value because it represents balances due from reputable customers and expects to collect their outstanding balances in full.

9.RENTAL AND OTHER DEPOSITS

Included in rental and other deposits are deposits paid to Guangzhou Goldlion City Properties Co., Ltd. of US$78,605 and Guangzhou Goldlion Environmental Technology Co., Ltd. of US$143,711 as of December 31, 2006. For relationship with the Group, please refer to note 15 (a) to these financial statements.

10.DISPOSAL CONSIDERATION RECEIVABLE

Disposal consideration receivable is the consideration receivable from Wisdom Plus Limited relating to the disposal of GBN on September 29, 2006 as detailed in Note 4 above.

The total consideration of US$4,000,000 is to be paid by 4 instalments from September 30, 2006 to July 29, 2007 in cash or shares of common stock issued by any Pink Sheet companies or OTCBB companies in lieu of the consideration. While cash of US$100,000 had been received as of December 31, 2006, second payment of cash of $900,000 was received on February 8, 2007 in accordance with the Agreement with the following schedules: US$100,000 to be paid on September 30, 2006; US$900,000 to be paid on January 29, 2007; US$1,000,000 to be paid on April 29, 2007; and US$2,000,000 to be paid on July 29, 2007.As of the date of issuance of this report, total cash of US$1,000,000 had been duly received in accordance with the Agreement.

11.AMOUNT DUE FROM/TO RELATED PARTIES

(a) Due from related parties
	As of December 31, 2006
	US$
Classified as current assets		-

59

(b) Due from related companies
	As of December 31, 2006
	US$
Classified as current assets		-

(c) Due from affiliate company
	As of December 31, 2006
	US$
CWT International Excursion Investment Ltd.		25,163
Classified as current assets		25,163
The amounts due from related parties and related companies and affiliate company as of December 31, 2006 represented unsecured advances which were interest-free and repayable on demand.

(d) Due to related parties
	As of December 31, 2006
	US$
Classified as current liabilities		-

(e) Due to related companies
	As of December 31, 2006
	US$
Guangzhou Goldlion City Properties Co., Ltd.		3,258
Beijing Wanlong Economic Consultancy Corporation Ltd.		28,814
Guangzhou City International Exhibition Co.		19,210
Classified as current liabilities		51,282

The amounts due to related parties as of December 31, 2006 represented unsecured advances which were interest-free and repayable on demand.

The amount due to related companies relates to rental and management fees and advisory fees.

60

12. SHORT-TERM INVESTMENTS

The balance represents equity securities classified as “available-for-sale”. As at the balance sheet date, the “available-for-sale” securities are stated at the fair value and correspondingly an unrealized gain of US$Nil is carried on the balance sheet as accumulated other comprehensive income.

Amount of short-term investments as of December 31, 2006 is Nil subsequent to the disposal of GBN detailing in note 4 above.

13. PROPERTY USE RIGHTS

Pursuant to agreements entered into between a subsidiary of the Company, Guangdong New Generation Commercial Management Limited (“GNGMC”), and Guangdong Hauhao Industries Group Co. Limited and Chen Zeliang dated December 28, 2004, GNGMC acquired the property use rights of their office premises located in Guangzhou for a 41-year period and 42-year period commencing from the date of agreements to October 30, 2045 and March 30, 2046 respectively. The total consideration of these transactions were US$1,611,648 The property use rights acquired have been capitalized and are being amortized on a straight-line basis over their lease terms.

Amount of property use rights of December 31, 2006 is Nil subsequent to the disposal of GBN detailing in note 4 above.

14. GOODWILL

	As of December 31, 2006
	US$
Carrying value, beginning of year		11,279,314
Carrying value, end of year		-

Amount of goodwill as of December 31, 2006 is Nil subsequent to the disposal of GBN detailing in note 4 above.

15.PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

	As of December 31, 2006
	US$
Office and computer equipment		22,651
Motor vehicles		63,023
		85,674
Less: Accumulated depreciation		19,960
Net book value		65,714

Total depreciation for the years ended December 31, 2006 and 2005 was US$245,196 and US$265,062, respectively.

Despite the operating loss experienced by the club operations of the Group, management considers that impairment losses are not necessary for the year ended December 31, 2006 because of the immaterial amount (2005: US$38,598).

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16. LOAN RECEIVABLE

The loans receivable are those loans to non-related companies which are interest bearing and having a fixed repayment schedule.

17. SHORT-TERM BANK LOAN

Guangdong Hauhao Industries Holdings Limited, Guangdong Hauhao Insurance Agency Limited, Chen Zeliang and a third party, Guangzhou Qidu Guarantee Service Company Limited provided corporate and personal guarantee to the bank against the bank loans of US$1,234,979 granted to GNGCM.

A pledged deposit of US$412,484 was used to secure the bank loans of US$1,111,482 granted to Guangdong Airport Tour Service Limited. In additions, GNGCM, Chen Zeliang and Suo Hong Xia provided corporate and personal guarantee to the bank against the bank loans.

Please refer to note 15(a) to these financial statements for details of relationship of these guarantors with the Group.

Amount of short-term bank loan as of December 31, 2006 is Nil subsequent to the disposal of GBN detailing in note 4 above.

18. RELATED PARTY TRANSACTIONS

(a) Names and relationship of related parties

	Existing relationships with the Company
Beijing Wanlong Economic Consultancy Corporation Ltd.	PRC partner of a subsidiary
Bernard Chan	An ex-officer and an ex-shareholder of the Company
Chan Chi Ming	A director, shareholder and officer of the Company
Chen De Xiong	A shareholder and director of a subsidiary
Chen Zeliang	A shareholder and director of the Company
Chinamax International Ltd.	An ex-shareholder of a former subsidiary
Glory River Corporation	A company which an officer of the Company is a director
Goldlion Holding Ltd.	A company controlled by close family members of a director
Guangdong Huahao Industries Group Co. Ltd.	A shareholder of a subsidiary
Guangdong WTC Link Information Services Ltd.	A former subsidiary company which a director of the Company is a director
Guangzhou City International Exhibition Co.	PRC partner of a subsidiary
Guangzhou Cyber Strategy Limited	A company in which a director of the Company has beneficial interest
Guangzhou Goldlion City Properties Co., Ltd.	A company controlled by close family members of a director
Guangzhou Goldlion Environmental Technology Co., Ltd.	A company controlled by close family members of a director
Guangzhou Sanranxin Travel Ltd	A company which a director of the Company has beneficial interest
Ho Chi Kin	An independent director of the Company
HK (Xian) Trade Association Ltd.	A non-profit making organization which a director of the Company is a director
Huang Ze Hua	A shareholder and director of a subsidiary
John Hui	A director, shareholder and ex-officer of the Company
Luo Chao Ming	A director of the Company
Suo Hong Xia	A shareholder and director of a subsidiary
William Tsang	A director, shareholder and officer of the Company

62

(b)Summary of related party transactions

				Year ended December 31,
	Notes			2006			2005
				US$			US$
Disposed property, plant and equipment to
Guangzhou Goldlion Environmental Technology Co., Ltd.		(i	)		-			2,457,382
Disposed rental income rights to
William Tsang		(ii	)		-			1,320,000
Increase (decrease) in allowance for doubtful accounts to
Guangzhou Cyber Strategy Limited		(iii	)		(4,859	)		12,031
Guangdong WTC Link Information Services Ltd.					15,525			-
Consultancy fee expenses to
Beijing Wanlong Economic Consultancy Corporation Ltd.		(iv	)		18,816			18,323
Guangzhou City International Exhibition Co.		(v	)		18,816			18,323
Glory River Corporation		(xvii	)		65,385			-
Bernard Chan		(x	)		12,821			88,650
Huang Zehua		(xii	)		2,779			3,638
Suo Hongxia		(xiii	)		1,389			1,835
Chen Dexiong		(xiv	)		4,446			5,202
Director fee to:
Ho Chi Kin		(vi	)		1,000			6,000
William Tsang		(ii	)		150,000			162,500
Chan Chi Ming		(vii	)		77,062			92,197
John Hui		(viii	)		-			150,000
Luo Chao Ming		(ix	)		11,961			19,142
Chen Zeliang		(xi	)		14,820			29,445

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				Year ended December 31,
	Notes			2006		2005
Rent and related expenses to
Guangzhou Goldlion City Properties Co., Ltd.		(xv	)		231,068		256,893
Guangzhou Goldlion Environmental Technology Co., Ltd.		(i	)		179,948		139,446
Personal guarantee granted from
Mr. William Tsang		(ii	)		-		19,231
Traveling expenses to
Guangzhou Sanranxin Travel Ltd.		(xvi	)		115,553		6,125
Other expenses to
Goldlion Holdings Ltd.		(xvii	)		1,362		4,643
Other income from
Guangzhou Goldlion City Properties Co., Ltd.		(xv	)		-		3,854
Sponsorship donation to
HK (Xian) Trade Association Ltd.		(xx	)		38,462		-

Notes:

(i)   As of December 31, 2006, the amount due from/to Guangzhou Goldlion Environmental Technology Co., Ltd. is US$Nil.

(ii)   As of December 31, 2006, the amount due to Mr. William Tsang is US$1,666,696.

(iii)   As of December 31, 2006, the amount due from/to Guangzhou Cyber Strategy Limited is US$Nil.

(iv)   As of December 31, 2006, the amount due to Beijing Wanlong Economic Consultancy Corporation Ltd. is US$28,814.

(v)   As of December 31, 2006, the amount due to Guangzhou City International Exhibition Co. is US$19,209.

(vi)   As of December 31, 2006, the amount due from/to Mr. Ho Chi Kin is US$Nil.

(vii)   As of December 31, 2006, the amount due from/to Mr. Chan Chi Ming is US$Nil.

(viii)   As of December 31, 2006, the amount due from/to Mr. John Hui is US$Nil.

(ix)   As of December 31, 2006, the amount due from/to Mr. Luo Chao Ming is US$Nil.

(x)   As of December 31, 2006, the amount due from/to Mr. Bernard Chan is US$Nil.

(xi)   As of December 31, 2006, the amount due from/to Mr. Chen Zeliang is US$Nil.

(xii)   As of December 31, 2006, the amount due from Ms. Huang Zehua is US$Nil.

(xiii)   As of December 31, 2006, the amount due to Ms. Suo Hongxia is US$Nil.

(xiv)   As of December 31, 2006, the amount due from Mr. Chen Dexiong is US$Nil.

(xv)   As of December 31, 2006, the amount due to Guangzhou Goldlion City Properties Co., Ltd. is US$3,258.

(xvi)   As of December 31, 2006, the amount due from Guangzhou Sanranxin Travel Ltd. is US$Nil.

(xvii)   As of December 31, 2006, the amount due to Goldlion Holdings Ltd. is US$Nil.

(xviii)   As of December 31, 2006, the amount due to Glory River Corporation is US$Nil.

(xix)   As of December 31, 2006, the amount due from Guangdong WTC Link Information Services Ltd, is US$Nil.

(xx)   As of December 31, 2006, the amount due to HK (Xian) Trade association Ltd. is US$Nil.

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19. AMOUNT DUE TO A SHAREHOLDER

The amount due to Mr. William Tsang represented unsecured advances which were interest-free and repayable on demand.

20. OPERATING LEASE COMMITMENT

(a) Operating lease payables

As of December 31, 2006, the Group has total outstanding commitments not provided for under non-cancelable operating leases, which are payable as follows:

	As of December 31,
	2006	2005
	US$	US$
2007	504,389	706,723
2008	475,618	472,593
2009	344,134	194,416
2010	332,496	32,391
2011	193,956	-
	1,850,593	1,406,123

In addition, the Group has committed to pay contingent rent at 2% to 10% on the monthly turnover of a subsidiary when the subsidiary's monthly turnover exceeds RMB500,000 (US$64,031) during the lease period ending in July 2007.

The Group has also committed to pay contingent rental at the higher of the agreed rent and the following portion of the membership fee income of a subsidiary:

·   15% on the membership fee income of the subsidiary for the period from February 1, 2005 to January 31, 2006

·   7.5% on the membership fee income of the subsidiary for the period of February 1, 2006 to January 31, 2009

(b) Operating lease receivables

The total outstanding commitments under non-cancelable operating leases, which are receivable as follows:

	As of December 31,
	2006		2005
	US$		US$
2007		105,597		109,425
2008		-		12,226
		105,597		121,651

As of December 31, 2006, property, plant and equipment held for use under operating leases include gross amounts of US$85,675 and accumulated depreciation. Depreciation of property, plant and equipment in respect of assets held for use under operating leases are US$20,373 and US$7,899 for the year ended December 31, 2006 and 2005 respectively.

65

21. RETIREMENT PLAN

The Group operates a Mandatory Provident Fund (“MPF”) plan for its Hong Kong employees. The pension expenses charged to the consolidated statement of operations amounted to US$5,215 and US$5,366 for the year ended December 31, 2006 and 2005 respectively. Total contribution to the MPF including employee contribution (which is accounted for as salary and wages) charged to the consolidated statement of operations amounted to US$10,430 and US$10,627 for the year ended December 31, 2006 and 2005 respectively.

As stipulated by the PRC regulations, all retired employees of the Group who are residents of the PRC are entitled to an annual pension equal to their basic annual salary upon retirement. The Group contributed to a state-sponsored retirement plan at a certain percentage of the gross salary of its employees and has no further obligations for the actual pension payments or post-retirement benefits beyond the annual contributions. The state-sponsored retirement plan is responsible for the entire pension obligations payable to all employees. The pension expense for the year ended December 31, 2006 and 2005 was US$167,177 and US$171,837, respectively.

22. COMMON STOCK

(a) On April 27, 2006, the Company issued 280,000 shares to Grace Motion Inc. for consulting services provided. Consultancy fee amounting to $383,600 had been fully accounted for during the year ended December 31, 2006 in accordance with terms of the consultancy contract, which is based on the vested date (that is, contract date) share price of $1.37 as of April 17, 2006 multiplied by the 280,000 shares issued. The shares issued were unrestricted, pursuant to an S-8 registration filed with the SEC on October 28, 2003.

(b) On April 27, 2006, the Company issued 117,000 shares to Mr. Andy Lau for consulting services provided. Consultancy fee $162,630 had been fully accounted for during the year ended December 31, 2006 in accordance with terms of the consultancy contract, which is based on the vested date (that is, contract date) share price of $1.39 as of April 21, 2006 multiplied by the 117,000 shares issued. The shares issued were unrestricted, pursuant to an S-8 registration filed with the SEC on October 28, 2003.

(c) On August 15, 2006, the Company issued 800,000 shares to Greentree Financial Group, Inc. for consulting services provided. Of the total amount of consultancy fee $1,096,000, $845,747 had been accounted for during the year ended December 31, 2006 in accordance with terms of the consultancy contract, which is based on the vested date (that is, contract date) share price of $1.37 as of March 23, 2006 multiplied by the 800,000 shares issued. The shares issued were unrestricted, pursuant to an S-8 registration filed with the SEC on June 8, 2006.

(d) On November 20, 2006, the Company issued 9,000,000 shares to Mr. Chi Hung Tsang to acquire 25 common shares of CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), presenting a 25% equity interest in CWT Excursion. The acquisition consideration of CWT Excursion amounts to $6,408,000. It is the fair market value of the CWTD Shares issued to Mr. Tsang, based on the closing bid price for the common stock of CWTD in the last five trading days preceding the date of the Agreement of $0.712.

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23.OPTIONS PLAN

(a) (i) On December 31, 2003, the Company adopted The 2003 Plan which was approved by the shareholders on the same date. The 2003 Plan allows the Board of Directors, or a committee thereof at the Board’s discretion, to provide for a total 1,000,000 stock options to officers, directors and key employees of the Company. All the stock options provided, were issued in accordance with the terms of The 2003 Plan on the same day to certain officers, directors and key employees of the Company at an exercise price of US$0.673 per share and are exercisable during the period from April 30, 2004 to December 30, 2006.

               (ii)On February 20, 2004, the Company cancelled 65,000 options and 30,000 options for the reason of resignation and job reposting respectively.

(b) On February 27, 2004, the Company entered into an agreement with Xelex Inc. for consulting services provided. Apart from the consultancy fee expenses, an option to acquire 80,000 shares at an exercise price of US$1 per share was issued to Xelex Inc.. The stock option was fully vested and became exercisable on September 1, 2004. On November 9, 2004, the option was fully exercised on a cashless basis. A total of 58,552 common stocks of the Company were issued

The fair value of this option, which is estimated by the Black-Scholes option pricing model, was US$3.89. The additional expense was recognized in the preceding year consolidated statement of operations and the same amount was credited to the Company’s additional paid-in capital. The following weighted-average assumptions have been adopted in applying the Black-Scholes option pricing model:

Expected dividend yield	None
Risk-free interest rate	2.1%
Expected volatility	367%
Contractual life	2 years

(c)   The stock options activities and related information are summarized as follows:        

	Year ended December 31,
	2006				2005
	Number of Options		Weighted average exercise price		Number of Options			Weighted average exercise price
			US$					US$
Outstanding, beginning of year		1,400,000		3.0		1,852,500			2.432
Granted		-		-		-			-
Granted		-		-		-			-
Exercised
- The 2003 Plan		-		-		(452,500	)		0.673
- Xelex Inc.		-		-		-			-
Cancelled		-		-		-			-
Outstanding, end of year		1,400,000		3.0		1,400,000			3.0
Exercise price is less than market price on date of grant		Nil		Nil		Nil			Nil
Exercisable, end of year		1,400,000		3.0		1,400,000			3.0

67

	As of December 31, 2006
Weighted average remaining contractual life	0.5 year
Range of exercise price
US$3.0		1,400,000

24.PRIVATE PLACEMENTS OF COMMON STOCK AND WARRANTS TO PURCHASE COMMON STOCK

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(a) On August 26, 2004, the Company entered into a Securities Purchase Agreement with Bridges & PIPES, LLC, TCMP3 Partners, Cornell Capital Partners, LP and Stealth Capital, LLC (the “Purchasers”), providing for the issuance by the Company to the Purchasers, of the (i) number of shares of Common Stock, and (ii) Series A Warrants, subject to an option in favor of the Purchasers to purchase additional shares of common stock and receive additional warrants.

On August 26, 2004 and December 3, 2004 under the Securities Purchase Agreement, the Purchasers acquired in the aggregate 433,333 and 966,667 shares of common stock respectively, at a price of US$1.5 per share, for an aggregate purchase price of US$2,100,000. Upon purchase, the Purchasers were also issued 700,001 five-year Series A Warrants to purchase that number of warrant shares at an exercise price equal to US$2.5 per share, without any additional consideration. In addition, the Company granted each Purchaser an option (the "Option") to purchase that number of shares of common stock equal to 1,400,001 shares (the "Firm Shares"). Upon exercise of the Option at a purchase price of US$3 per share of common stock, the Purchaser would also receive, without additional consideration, five-year Series B Warrants to purchase 50% of the Firm Shares at an exercise price equal to US$4 per share.

The fair values of attached Series A Warrants, Options and Series B Warrants were recorded in the Company’s additional paid-in capital.

In addition, the Company has issued 112,667 Placement Agent's Warrants to Duncan Capital, LLC, who acted as Placement Agent to the Company in connection with the offering. Such warrants are five-year non-cashless exercise, provisioned warrants to purchase shares of common stock at US$2.5 per share. The costs associated with these transactions are also accounted for based on the fair value of these warrants at the date of issue.

On August 26, 2004, the Company also entered into a Registration Rights Agreement with the investors signatories thereto, which provides that on or prior to 45 days after the Escrow Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities (defined as the Firm Shares, Option Shares, shares issuable upon exercise of the Agent's Warrants and shares issuable upon exercise of the Series A Warrants and the Series B Warrants) for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act. In addition, the Registration Rights Agreement also contains certain piggy-back registration rights in favor of the holders of Registrable Securities. All fees and expenses incident to the performance of or compliance with the Registration Rights Agreement are to be borne by the Company.

(b) On November 22, 2004, the Company entered into a Standby Equity Distribution Agreement (a "SEDA") and a Registration Rights Agreement, with US-based investment fund, Cornell Capital Partners, LP ("Cornell Capital") for US$30,000,000. Under the SEDA, Cornell has committed to provide up to US$30,000,000 of funding to the Company over a 24-month period, to be drawn down at the Company's discretion by the purchase of the Company's common stock. The purchase price of the shares purchased under the SEDA with respect to any advance will equal 99% of, or a 1% discount to, the lowest closing bid price of the common stock during the five consecutive trading day period immediately following the notice date. The amount of each advance is subject to a maximum advance amount of $1,500,000, except for the first advance, which may be in the amount of $3,000,000. Cornell Capital intends to sell any shares purchased under the SEDA at the then prevailing market price. Duncan Capital, LLC has been engaged by the Company to act as Placement Agent with respect to the SEDA.

(c) In connection with the SEDA, the Company has entered into a Letter Agreement, dated as of November 19, 2004 (the "Letter Agreement"), pursuant to which it agreed to (a) not make any draw-downs under the SEDA for a period of thirty days from the date of effectiveness of the soon-to-be-filed registration statement, and (b) issue to Bridges & PIPES, LLC and TCMP3 Partners, the two Purchasers at the first closing referred to above, 83,334 Series A Warrants and 25,000 Series A Warrants, respectively, in order to induce such Purchasers to waive their rights to be the sole registrants on the registration statement. The costs associated with these compensations are also accounted for based on the fair value of these warrants at the date of issue.

Using the Black-Scholes option pricing model with the following weighted-average assumptions:

Expected dividend yield	None
Risk-free interest rate	3.61%
Expected volatility	211%
Contractual life	2.86 years

The fair value of these warrants was estimated as US$0.201 for the year ended December 31, 2006. The additional expenses for placement services provided and compensation of were recognized in the preceding year consolidated statement of operations and the same amounts were credited to the Company’s additional paid-in capital. No additional expenses was recognized during the year because of no further issue of warrants for services.

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The warrant activities and related information are summarized as follows:

	Year ended December 31,
	2006				2005
	Number of Warrants		Weighted average exercise price		Number of Warrants			Weighted average exercise price
			US$					US$
Outstanding, beginning of year		921,002		2.5		5,421,002			1.047
Granted		-				-			-
Exercised		-				(4,500,000	)		0.749
Outstanding, end of year		921,002		2.5		921,002			2.500
Exercise price is less than market price on date of grant		Nil		Nil		Nil			Nil
Exercise price exceeds market Price on date of grant		921,002		2.500		921,002			2.500
Exercisable, end of year		921,002		2.500		921,002			2.500

	As of December 31, 2006
Weighted average remaining contractual life	2.86 years
Range of exercise price
US$ 2.500	921,002

(d) The Group had fully accounted for liquidated damage expense of US$211,500 and US$208,500 for the year ended December 31, 2006 and 2005 respectively in connection with the failure to have its registration statement become effective as required under the terms of the Securities Purchase Agreement in which US$650,000 was raised in August 2004 and US$1,400,000 was raised in December 2004. Under section 2(c) of the Registration Rights Agreement, in part, that each investor is entitled to be paid an amount in cash until a registration statement is declared effective and/ or the Registrable Securities may be sold pursuant to Rule 144(k) (which requires a two years holding period. If a registration statement is not declared effective on or prior to one hundred twenty days (120) days of closing, such amount is equal to one percent (1%) of the aggregate purchase price paid by the Investors. We quantified the amount with reference to the date when the 120 days period expires and accrued the liquidated damage expense on a time apportionment basis in respect of both amounts raised in August and December 2005 amounting to US$650,000 and US$1,400,000 respectively. Of total amount of US$420,000 provided, US$145,000 had been paid in March 2006.

(e) The Company has taken the position that its earlier filing with the Commission of a Registration Statement on Form SB-2 covering the proposed sale in a secondary offering of $30.0 million of Registrable Securities pursuant to a Standby Equity Distribution Agreement, and the proposed sale of other securities pursuant to a Securities Purchase Agreement dated August 26, 2004, has been terminated as a result of the failure of such registration statement to be declared effective by the Commission after the filing of a sixth and final amendment on February 3, 2006. .

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25.STATUTORY RESERVES

Statutory reserves of the Company’s PRC subsidiaries include the statutory common reserve fund and the statutory common welfare fund. Pursuant to regulations in the PRC, the subsidiaries set aside 10% of their profits after tax for the statutory common reserve fund (except when the fund has reached 50% of the Company’s registered capital) and 5% of their profits after tax for the statutory common welfare fund. The statutory common reserve fund can be used for the following purposes:

-   to make good losses in previous years; or

-   to convert into capital, provided such conversion is approved by a resolution at a owners’ general meeting and the balance of the statutory common reserve fund does not fall below 25% of the registered capital.

The statutory common welfare fund, which is to be used for the welfare of the staff and workers of the subsidiaries, is of a capital nature.

Amount of statutory reserve as of December 31, 2006 is Nil subsequent to the disposal of GBN detailing in note 4 above.

26.SEGMENTAL REPORTING

The Group has four reportable segments; club and business centre, business traveling services, business value-added services and rental and others with four separate businesses lines in access services and product sales.

The following table presents information about the Company's business segments for the years ended December 31, 2006 and 2005:

27.BUSINESS SEGMENT INFORMATION

	Year ended December 31,
	2006		2005
Operating revenues	US$		US$
Club and business centre		712,368		894,550
Business traveling services		2,689,139		4,983,468
Business value-added services		927,445		1,618,413
Rental		10,385		221,699
Trading and others		-		121,094
		4,339,337		7,839,224

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	US$			US$
Profit (Loss) from operations
Club and business centre		(328,938	)		(403,250	)
Business traveling services		(754,320	)		976,896
Business value-added services		29,469			(3,125,705	)
Rental		(130,975	)		(336,406	)
Trading and others		-			(67,247	)
		(1,184,764	)		(2,955,712	)
Corporate expenses		(3,424,355	)		(2,334,070	)
Consolidated operating loss		(4,609,119	)		(5,289,782	)
Realized gain on available-for-sale securities
Other income		44,735			42,581
Interest income		37,751			28,171
Interest expense		(209,099	)		(136,426	)
Equity in earnings of affiliates		(180,175	)		-
Impairment loss on investment in an affiliate		(2,140,359	)		-
Gain (loss) on disposal of a subsidiary		(3,210,538	)		85,854
Realized gain on disposal of available-for-sale securities		46,000			6,079,960
Loss on disposal of property, plant and equipment		(9,395	)		(254,740	)
Loss on disposal of dormant subsidiaries		(321,185	)		-
Net loss before income taxes		(10,551,384	)		555,618

	As of December 31, 2006
Total assets	US$
Club and business centre		453,995
Business traveling services		8,894,492
Business value-added services		46,084
Rental		-
Trading and others		4,138,650
		13,533,221

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28.CONCENTRATIONS AND RISKS

(i)Major Customers

The following is a table summarizing the revenues from customers that individually represent greater than 10% of the total revenues for the year ended December 31, 2006 and their outstanding balances as at year end date:

	Year ended December 31,
	2006		2005
	US$		US$
Customer A		1,487,780		3,087,215

As of December 31, 2006, the balances due to the Group amounted to US$Nil.

(ii)Major Vendors

The following is a table summarizing the purchases from vendors that individually represent greater than 10% of the total purchases for the year ended December 31, 2006 and their outstanding balances as at year end date:

	Year ended December 31,
	2006		2005
	US$		US$
Vendor A		845,747		2,500,990

As of December 31, 2006, the balances due from the Group amounted to US$Nil.

(iii)Credit Risk

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Group believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Group does not generally require collateral from customers. The Group evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(iv)Exchange risk

The Group cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Group could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of RMB and HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

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29.CONTINGENCIES

Prior to the completion of acquisition by the Company, Guangdong New Generation Commercial Management Ltd. (“New Generation”), a former subsidiary of the Company, had been paying Mainland China income tax at a basis of calculation which was not in accordance with the standard basis of calculation as stipulated by the Mainland China tax law. The shortfall of the underpaid tax liabilities, related surcharges and penalty up to the date of acquisition by the Company has already been fully provided in the consolidated financial statements. However, New Generation would potentially be liable to further surcharge for late payment and penalty, additional to the amount being provided, for the period since the date of acquisition by the Company and up to the balance sheet date. A shareholder of New Generation has undertaken to indemnify the Company against such shortfall and additional tax-related liabilities. As of December 31, 2006, the estimated further surcharges and penalties which New Generation was potentially liable amounted to US$9,470,714 and US$185,771 respectively. The estimated further penalties were based on the highest charge rate of the range from 50% to 500%.

Subsequent to the disposal of GBN on September 29, 2006 as detailing in note 4 above, New Generation ceased to be a subsidiary of the Company and this contingency will have a potential indirect effect on the carrying value of the investment in affiliate companies. Of total US$8,894,492, investment in affiliate company relating to GBN amounted to US$2,538,529 as of December 31, 2006.

30. DORMANT SUBSIDIARIES

The following subsidiaries are dormant during the year ended December 31, 2006.

(i)	China Chance Enterprises Limited
(ii)	June Success Ltd.
(iii)	Rainbow Wish Ltd.
(iv)	Sinopac Success Ltd.

Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 On February 16, 2006, Moore Rowland Mazars, Chartered Accountants (“MRM”) resigned as the independent registered public accounting firm for the Company. MRM had been the independent registered public accounting firm for and audited the consolidated financial statements of the Company for the year ended September 30, 2003, for the three months ended December 31, 2003, and for the year ended December 31, 2004. All of the foregoing audited consolidated financial statements are hereinafter collectively referred to as the “consolidated financial statements.” The reports of MRM on the consolidated financial statements for the past fiscal years indicated contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for an explanatory paragraph relating to the Company’s ability to continue as a "going concern." The tender of resignation by MRM was approved unanimously by the Board of Directors.

 In connection with the audits for the two most recent fiscal years and in connection with MRM’s review of the subsequent interim periods through February 16, 2006, there have been no disagreements between the Company and MRM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of MRM, would have caused MRM to make reference thereto in their report on the Company’s financial statements for these fiscal years. MRM agreed with the foregoing statements in the letter that it was required to send to the Commission pursuant to Item 304 of Regulation S-B.

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 On February 16, 2006, the Company engaged Zhong Yi (Hong Kong) C.P.A. Company Limited as its independent registered public accounting firm. The Company had not consulted with Zhong Yi (Hong Kong) C.P.A. Company Limited regarding the application of accounting principles to any contemplated or completed transactions nor the type of audit opinion that might be rendered on the Company’s financial statements, and neither written nor oral advice was provided that would be an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issues. At the time of its engagement, Zhong Yi (Hong Kong) C.P.A. Company Limited had not yet been credentialed for practice before the Commission, although it began the credentialing process in November of 2005.

 On March 23, 2006, Zhong Yi (Hong Kong) C.P.A. Company Limited (“Zhong Yi”) resigned as the independent registered public accounting firm for the Company. Zhong Yi had been engaged on February 16, 2006 as the independent registered public accounting firm to audit the consolidated financial statements of the Company for the year ended December 31, 2005. Zhong Yi was not credentialed to practice accounting before the Commission, but it had an application to be admitted pending with the Commission since November of 2005. Zhong Yi determined that it may not be credentialed in time and may not be able to finish and submit its audit report to the Commission in connection with the filing of this Annual Report on Form 10-KSB for the year ended December 31, 2005. As a result, Zhong Yi chose to resign in order to give the Company an opportunity to engage a credentialed auditing firm. The draft report of Zhong Yi on the audited consolidated financial statements for the past fiscal year contained no adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles, except for an explanatory paragraph relating to the Company’s ability to continue as a "going concern." Zhong Yi’s tender of resignation was approved unanimously by the Board of Directors.

 In connection with the audit for the most recent fiscal year and in connection with Zhong Yi’s review of the subsequent interim periods through March 23, 2006, there have been no disagreements between the Company and Zhong Yi on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Zhong Yi, would have caused Zhong Yi to make reference thereto in its report on the Company’s financial statements for the last fiscal year. Zhong Yi agreed with the foregoing statements in the letter that it was required to send to the Commission pursuant to Item 304 of Regulation S-B.

On March 23, 2006, the Company engaged Child, Van Wagoner & Bradshaw, PLLCas its independent registered public accounting firm. The Company had not consulted with Child, Van Wagoner & Bradshaw, PLLC regarding the application of accounting principles to any contemplated or completed transactions nor the type of audit opinion that might be rendered on the Company’s financial statements, and neither written nor oral advice was provided that would be an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue

Item 8A. Controls and Procedures

Annual Evaluation of Controls. As of the end of the period covered by this annual report on Form 10-KSB, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls"). This evaluation (“Evaluation”) was performed by our Chief Executive Officer, Chi Ming Chan (our “CEO”), and our Chief Financial Officer, Man Ha (our “CFO”). In addition, we have discussed these matters with our securities counsel. In this section, we present the conclusions of our CEO and CFO based on and as of the date of the Evaluation with respect to the effectiveness of our Disclosure Controls..

CEO and CFO Certifications. Attached to this annual report are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a-14(a)/15d-14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a-14(a)/15d-14(a) Certifications. This information should be read in conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete understanding of the topic presented.

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Disclosure Controls. Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to us is made known to the CEO and the CFO by others, particularly during the period in which the applicable report is being prepared.

Limitations on the Effectiveness of Controls. Our management does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their design and monitoring costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Evaluation. The CEO and CFO's evaluation of our Disclosure Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this quarterly report. In the course of the Evaluation, the CEO and CFO sought to identify data errors, control problems, acts of fraud, and they sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to make modifications if and as necessary. Our intent in this regard is that the Disclosure Controls will be maintained as dynamic systems that change (including improvements and corrections) as conditions warrant.

Conclusions. Based upon the Evaluation, our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives. Our CEO and CFO have concluded that our disclosure controls and procedures are effective at that reasonable assurance level to ensure that material information relating to the Company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective at that assurance level to provide reasonable assurance that our financial statements are fairly presented inconformity with accounting principals generally accepted in the United States. Additionally, there has been no change in our Internal Controls that occurred during our most recent fiscal quarter or fiscal year that has materially affected, or is reasonably likely to affect, our Internal Controls.

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PART III

Item 9. Directors and Executive Officers of the Registrant

Directors and Executive Officers

Our Bylaws provide that we shall have that number of directors determined by the majority vote of the board of directors. Currently we have seven directors. Each director will serve until our next annual shareholder meeting. Directors are elected for one-year terms. Our Board of Directors elects our officers at the regular annual meeting of the Board of Directors following the annual meeting of shareholders. Vacancies may be filled by a majority vote of the remaining directors then in office. Our directors and executive officers are as follows:

Name	Age	Position
William Chi Hung Tsang	45	Chairman, Director and President
Zeliang Chen	41	Vice Chairman and Director
John H.W. Hui	48	Vice Chairman, and Director
Chi Ming Chan	45	Chief Executive Officer and Director
Chao Ming Luo	56	Director
Man Ha	44	Chief Financial Officer
Ye Xin Long	61	Independent Director
Hamid R. Seyedin	55	Independent Director

Backgrounds of Directors

Executive Directors

Mr. William Chi Hung Tsang, aged 45, is the President and Chairman of the Board of Directors of China World Trade Corporation. Mr. Tsang has more than 15 years of experience in leatherwear manufacturing and property investment. Prior to joining the Company, he was an executive director with a listed company for over 10 years. He is a member of the Beijing Municipal Committee of the Chinese People’s Political Consultative Conference; committee member of Chinese General Chamber of Commerce, Hong Kong; vice chairman of Hong Kong United Youth Association Limited; chief president of New Territories Commercial & Industrial General Association Ltd.; and vice chairman of both Hong Kong Chamber of Commerce in China - Guangdong and Guangzhou Federation of Industry & Commerce. He is also an honorary president of North-East Overseas Chinese Friendship Association U.S.A., and an honorable citizen of Guangzhou.

Mr. Zeliang Chen, aged 41, is the Vice Chairman and Director of the Company. Mr. Chen graduated with honors from Renmin University of China with a Bachelor of Law. He is the founder of Guangdong Hua Hao Group of Companies and is a committee member of the Private Enterprise Council of Guangdong Province. Mr. Chen now is a Chief Executive Officer and Chairman of Guangdong New Generation Travel Service Co., Ltd., Director of Guangdong Huahao Industries Group of Companies, Director and Vice Chairman of China World Trade Corporation.

Mr. John H.W. Hui, aged 48, is the Vice Chairman of the Board of Directors. Mr Hui served as Chief Executive Officer of the Company until January 5, 2006. . Mr. Hui has over 10 years experience in China trade and investment. He is responsible for the overall corporate development of the Company. Mr. Hui is also the President of Beijing World Trade Center Club and Guangzhou World Trade Center Club. He has excellent relationships with the China partners and the principals of the World Trade Center Association in New York and other WTCs around the world. Mr. Hui is a current member of the Canada Business Council Beijing, and American Chamber of Commerce, Guangdong.

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Mr. Chi Ming Chan, aged 45, is a Director and was appointed as Chief Executive Officer of the Company on January 5, 2006. Mr. Chan is responsible for the strategic planning, corporate development and project implementation of the Company. Before joining us, Mr. Chan was a Corporate Development Strategist for Renren Holding Ltd., a publicly listed company on the Hong Kong Stock Exchange. Mr. Chan founded Asian Information Resources (Holding) Ltd. in 1995, which eventually listed on the Hong Kong Stock Exchange in 1999. A specialist in Chinese law and China affairs, Mr. Chan is an expert in networking, Internet technology, database technology and management of technical resources. He developed an electronic database system for the Law-on-Line project of the University of Hong Kong and has provided technical consultancy to this project since 1991. He has also developed the Dongguan Network, which has become a successful model for other cities in China. He was appointed by the Asian Development Bank (ADB) as a consultant for the TA Project No. 2702 - Study on PRC Legal Information System and the Electronic Data Expert for the TA project No. 3000. Mr. Chan holds a Master of Law degree from Lancaster University, the United Kingdom, a Master of Philosophy degree in Physics and Bachelor Degree in Physics both from the Chinese University of Hong Kong.

Mr. Chao Ming Luo, aged 56 is a Director of the Company. Mr. Luo has long-term collaborative relations with Hong Kong business circles and associations. He was employed at the Xinhua News Agency Hong Kong from 1983 to 1996; he then joined the Xinhua News Agency Hong Kong Branch Guangzhou Representative Office in 1996 before joining the Company. He is the Chief Council Member of Guangdong Overseas Friendship Association, and Council Member of Guangzhou Overseas Friendship Association. Mr. Luo worked as the Electric Design Technician in Guangzhou Design Institute and the Assistant of Electric Technology Specialty, Electric Engineering Department in Guangdong University of Technology.

Independent Directors and Members of Audit Committee

Mr. Ye Xin Long, aged 61, is an Independent Director of the Company. Mr. Ye has over 35 years of experience doing business in China and investing in Chinese enterprises. He has an excellent relationship with the Beijing Municipal Government and the Guangzhou Municipal Government.

Mr. Hamid R. Seyedin, aged 55, is an Independent Director and a member of the audit committee of the Company. Mr. Seyedin is the CEO of First Washington Group and President of the American Chamber of Commerce in Guangdong. Under his leadership since 2003, the American Chamber of Commerce in Guangdong has grown by more than 83% in membership and 300% in revenues. In 1991, former U.S. President George Bush recognized him in writing for his involvement with the passage of the Fast Track Procedures for the North American Free Trade Agreement (NAFTA). Appointed by three governors of the State of Maryland to four terms of office, he served as the Chairman of Montgomery College and State Chairman of the Maryland Association of Community Colleges representing all seventeen colleges in the State. He served on the Board of Directors of the Kennedy Institute, by appointment of Cardinal James A. Hickey (then Archbishop of Washington). He was a recipient of an award in business from the U.S. Department of Commerce. He received recognition from the U.S. Senate Sergeant At Arms for his service to the U.S. Senate Deliberations. Finally, he served two terms on the Maryland Advisory Committee of the U.S. Civil Rights Commission.

Officers

Mr. Man Ha, aged 44, was appointed as Chief Financial Officer on February 28, 2006. He has over 20 years of experience in the areas of auditing, transaction advisory services and commercial fields. In the past, he was executive director, group financial controller and company secretary of several publicly traded companies that were listed on the Hong Kong Stock Exchange. Mr. Ha holds a Masters Degree in Professional Accounting from the Open University of Hong Kong. He is also a fellow member of The Association of Chartered Certified Accountants and The Hong Kong Institute of Certified Public Accountants.

There are no familial relationships between our officers and directors.

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Code of Ethics

The Company has adopted a Code of Ethics that applies to the Company’s principal chief executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as well as other employees (the "Code of Ethics"), a copy of which is attached as Exhibit 14.1 to our Form 10-KSB for the fiscal year ended December 31, 2005, and is incorporated herein by reference. The Code of Ethics is designed with the intent to deter wrongdoing, and to promote the following:

·   Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships

·   Full, fair, accurate, timely and understandable disclosure in reports and documents that a small business issuer files with, or submits to, the Commission and in other public communications made by the small business issuer

·   Compliance with applicable governmental laws, rules and regulations

·   The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code

·   Accountability for adherence to the code

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a company that files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for these reports have been established, and the Company is required to report, in this Form 10-KSB, any failure to comply therewith during the fiscal year ended December 2006. The Company believes that all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than 10% of the Company’s common stock. In making this statement, the Company has relied solely on copies of any reporting forms received by it, and upon any written representations received from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial Ownership) was required to be filed under applicable rules of the Commission.

Item 10 . Executive Compensation

Compensation Discussion and Analysis

We maintain a peer-based executive compensation program comprised of fixed and performance variable elements. The design and operation of the program reflect the following objectives:

-   Recruiting and retaining talented leadership.

-   Implementing measurable performance targets.

-   Correlating compensation directly with shareowner value.

-   Emphasizing performance based compensation, progressively weighted with seniority level.

-   Adherence to high ethical, safety and leadership standards.

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Designing a Competitive Compensation Package

Recruitment and retention of leadership to manage our Company requires a competitive compensation package. Our Board of Directors emphasizes (i) fixed compensation elements of base salary that compare with our compensation peer group of companies, and (ii) variable compensation contingent on above-target performance. The compensation peer group consists of those companies in the Guangdong region that we deem to compete with our Company for executive talent. Individual compensation will vary depending on factors such as performance, job scope, abilities, tenure and retention risk.

Fixed Compensation

The principal element of fixed compensation not directly linked to performance targets is based salary. We target the value of fixed compensation generally at the median of our compensation peer group to facilitate a competitive recruitment and retention strategy.

Incentive Compensation

Our incentive compensation programs are linked directly to earnings growth, cash flow, and total shareowner return. Annual bonuses are tied to the current year’s performance of our company. Restrictive stock awards are tied to an individual’s success in exceeding targeted results set by management.

Employment Agreements

Our executives do not have the typical employment agreements that specify compensation or length of employment. These matters are left to the discretion of the Board of Directors and the employee. At present, there are no employment contracts with any of our executives.

No compensation in excess of $100,000 was awarded to, earned by, or paid to any executive officer of China World Trade during the years 2006, 2005 and 2004, except as described below. The following table and the accompanying notes provide summary information for each of the last three fiscal years concerning cash and non-cash compensation paid or accrued by our chief executive officer and other executive officers earning in excess of $100,000 for the past three years.

SUMMARY COMPENSATION TABLE

Name of officer	Year	Salary	Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compen-sation	Nonquali- fied Deferred Compen- sation	All Other Compen- sation	Total
John Hui, Director	2006	-	-	-	-	-	-	-	-
John Hui, CEO	2005	150,000	-	55,823	-	-	-	-	205,823
John Hui, CEO	2004	57,692	-	206,347	-	-	-	-	264,039
William Chi Hung Tsang, Chairman & Director	2006	150,000	-	-			-	-	150,000
William Chi Hung Tsang, Chairman & Director	2005	150,000	12,500	198,480		-	-	-	360,980
William Chi Hung Tsang, Chairman & Director	2004	57,692		733,680	-	-	-	-	791,372
C. M. Chan, CEO & Director	2006	77,062	-	-	-	-	-	-	77,062
C. M. Chan, Director	2005	76,982	15,215	53,755	-	-	-	-	145,952
C.M. Chan, Director	2004	-	-	198,705	-	-	-	-	198,705

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Compensation of Directors

In 2001, China World Trade committed itself to compensate each of its Board of Directors with 2,000 shares of its common stock per annum. Board members typically meet on a bi-monthly basis.

2006 Non-Qualified Stock Compensation Plan

The following table sets forth information about our 2006 Non-Qualified Stock Compensation Plans adopted by our Board of Directors and filed with the Commission as Exhibit 10.1 to our Registration Statement on Form S-8 on June 8, 2006 and December 21, 2006.

Shares remaining available for future issuance	Shares issuable upon exercise of options to be granted in the future	Weighted average exercise price of outstanding options
5,700,000	-	-

Pursuant to the 2006 plans, we registered a total of 6,500,000 shares of common stock. The Compensation Committee of the Board of Directors will issue common stock and award options to employees, directors, officers, consultants, advisors and other persons associated with our company. The 2006 plans are intended to provide a method whereby our company may be stimulated by the personal involvement of our employees, directors, officers, consultants, advisors and other persons in our business and reward such involvement, thereby advancing the interests of our company and all of its shareholders.

As at December 31, 2006, a total of 800,000 shares of common stock were issued to consultants pursuant to our 2006 Non-Qualified Stock Compensation Plans, leaving a balance of 5,700,000 to be issued in the future.

Item 11 . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth the number of shares of common stock beneficially owned as of December 31, 2006 by (i) those persons or groups known to us who will beneficially own more than 5% of our common stock; (ii) each Director and director nominee; (iii) each executive officer whose compensation exceeded $100,000 in the fiscal year ended December 31, 2005; and, (iv) all directors and executive officers as a group. The information is determined in accordance with Rule 13d-3 promulgated under the Exchange Act based upon information furnished by persons listed or contained in filings made by them with the Securities and Exchange Commission and upon information provided by such persons directly to us. Except as indicated below, the stockholders listed possess sole voting and investment power with respect to their shares.

Name/Address	Number of Shares	Percentage Ownership(1)
William Chi Hung Tsang Room 1217, The Metropolis Tower, 10 Metropolis Drive, Hunghom, Hong Kong	21,787,675	49.7%
Powertronic Holdings Limited 9 Des Voeus Road West, 12 th Floor, Hong Kong	5,233,415	11.9%
Grand Perfection Limited (2) 15 th Floor, Rihang Hotel, 198 Linhe Road West, Guangzhou, PRC	1,368,619	3.1%
Chi Ming Chan 138 Tiyu Road East, 3 rd Floor, Goldlion Digital Network Center, Guangzhou, PRC	35,837	**
Chao Ming Luo 138 Tiyu Road East, 3 rd Floor, Goldlion Digital Network Center, Guangzhou, PRC	17,918	**
John Hui 7040 Granville Avenue, Suite 403, Richmond B.C. Canada	92,536	**
All Officers and Directors as a Group (5 persons)	23,302,585	53.1%

** Less than 1%

(1)Based on 43,865,923 shares outstanding as of December 31, 2006.

(2) Grand Perfection Limited is controlled by Zeliang Chen, a Director of the Registrant. 

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Item 12 . Certain Relationships and Related Transactions

We entered into a acquisition agreement (the “Acquisition Agreement”) dated November 19, 2003, with Mr. William Chi Hung Tsang (“Mr. Tsang”), the owner of the 21st to 23rd Floor of Goldlion Digital Network Center, 138 Tiyu Road, Tianhe, Guangzhou 510620, the PRC (the “Premises”). Mr. Tsang assigned to us the rents and other consideration (the “Rental Income Right”) valued at $1,800,000. Mr. Tsang was issued 3,000,000 shares of our common stock and warrants to purchase an additional 6,000,000 shares of our common stock (the “Warrants”) for $1,800,000 ($0.60 per share). The Warrants may be exercised between December 5, 2003 and December 1, 2005 at an exercise price of $0.75 per share. To date, Mr. Tsang has exercised the warrants to purchase up to 1,500,000 shares of our common stock and Mr. Tsang continues to hold a warrant to purchase up to 4,500,000 shares of our common stock until December 1, 2005.

The value of the Rental Income Right was determined by using the present value of the 5-year rental income rights of the Premises, or $1,831,795. This present value was based on the then actual rental income of the Premises, or $556,569. We then assumed the following percentages: (a) annual growth rate on the rental income of 3.0%, (b) rent free period and vacancy loss of 10%, and (c) business tax rate of 5.5%. We discounted back to November 2003 using a ten percent discount rate.

By a Settlement Agreement dated December 5, 2003, we converted $456,661.73 that was previously advanced by Mr. Tsang into 761,103 shares of common stock. In the quarter ended December 31, 2003, a personal guarantee was granted from Mr. Tsang in the amount of $19,231. As a result of these transactions, Mr. Tsang will beneficially own 71.82% of our shares of common stock, assuming exercise of all of his warrants.

We entered into a relationship with respect to rent and related expenses with Guangzhou Goldlion City Properties Co., Ltd. and Guangzhou Cyber Strategy Limited in the approximate amount of $96,154, and Dimension Marketing Limited in the amount of $80,645. These amounts have been classified as current liabilities. The amounts due to related parties represent unsecured advances which are interest-free and repayable on demand.

On December 30, 2004, General Business Network (Holdings) Limited, a wholly-owned subsidiary of our company, and Guangzhou Goldlion Environmental Technology Company Ltd., an affiliate of William Chi Hung Tsang, our Chairman, entered into an Agreement for Purchase and Sale of the premises known as the 20^th Floor of the Goldlion Digital Network Centre, Nos. 136 and 138 Ti Yu Dong Road, Tianhe District, Guangzhou PRC, pursuant to which Goldlion agreed to purchase the premises from General Business Network for $2,456,521.70 in cash. The closing occurred on May 31, 2005, and Goldlion paid the purchase price for the premises to General Business Network.

On March 29, 2005, our board of directors approved the sale of the after-tax rental income rights of 21^st and 23^rdFloor, Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou to our Chairman, Mr. Chi Hung Tsang at the book value of $1,320,000. As a result, a cash balance due from Mr. Tsang in the amount of $377,504 as of March 31, 2005 was subsequently paid off on April 28, 2005. The total consideration of $1,320,000 would be used to provide additional working capital for our group of companies.

On September 25, 2006, the Company together with its wholly owned subsidiary, Rainbow Wish Limited (“Rainbow Wish”), entered into a Share Exchange Agreement (the “Agreement”) with CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty percent (60%) of the capital stock of CWT Excursion, and also a citizen and resident of the People’s Republic of China. Pursuant to the terms of the Agreement, the Company will issue 9,000,000 shares of its common stock (the “CWTD Shares”) to Mr. Tsang in exchange for 25 common shares of CWT Excursion owned by him (the “CWT Excursion Shares”) to Rainbow Wish, presenting a 25% equity interest in CWT Excursion. Pursuant to the Agreement, Mr. Tsang has also agreed to grant Rainbow Wish the option to purchase an additional 35% of the capital stock of CWT Excursion within twelve months of the date hereof, at a price that will be agreed upon by both parties at the time of exercise of said option in a separate agreement.

The amounts due to related parties represent unsecured advances which are interest-free and repayable on demand.

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Item 13 . Exhibits and Reports on Form 8-K

(a) Exhibits . The exhibit list required by Item 13 of Form 10-KSB is provided in the " Index to Exhibits " located herein, immediately following Item 15.

(b) Reports on Form 8-K Filed in Fiscal Year 2006

(1)             On January 11, 2006, the Company filed a Form 8-K in order to report the new appointment of a president and vice-chairman and the election of new directors.

(2)	On February 21, 2006, the Company filed a Form 8-K regarding the changes of certifying accountants.
(3)	On March 1, 2006, the Company filed a Form 8-K in order to report the new appointment of their Chief Financial Officer.

                      (4) On March 20, 2006, the Company filed an amendment to the current report on Form 8-K/A regarding the changes of certifying accountants.

                      (5) On March 30, 2006, the Company filed a Form 8-K regarding the changes of certifying accountants.

(6)              On September 25, 2006, the Company entered into a Share Exchange Agreement (the “Agreement”) with Rainbow Wish Limited, a company organized and existing under the laws of the British Virgin Islands and a wholly owned subsidiary of the Registrant (“Rainbow Wish”), CWT International Excursion Investment Limited, a company organized and existing under the laws of the British Virgin Islands (“CWT Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty percent (60%) of the capital stock of CWT Excursion, and also a citizen and resident of the People’s Republic of China (“Tsang”). Pursuant to the terms of the Agreement, the Company intends to issue 9,000,000 shares of common stock (the “CWTD Shares”) to Tsang in exchange for the transfer by Tsang of twenty-five (25) common shares of CWT Excursion (the “CWT Excursion Shares”) to Rainbow Wish, representing a 25% equity interest in CWT Excursion. A copy of the Agreement is attached hereto as Exhibit 10 and is incorporated by reference herein.

                      (7) On September 29, 2006, China Chance Enterprises Limited,(“China Chance”), a wholly owned subsidiary of the Company, entered into a Sale and Purchase Agreement (the “Agreement”) with Wisdom Plus Limited, a limited liability company organized and existing under the laws of the British Virgin Islands (“Wisdom Plus”), pursuant to which China Chance agreed to sell and Wisdom Plus agreed to purchase, all of the outstanding registered shares (the “Shares”) of Rejoice Success Limited, the Company’s indirect wholly owned subsidiary holding 60% of the outstanding capital stock of General Business Network (Holdings) Ltd. which indirectly holds owns 51% of the outstanding capital stock of Guangdong New Generation Commercial Management Ltd (“New Generation”)., The purchase price for the Shares was $4.0 million, payable in installments in accordance with the schedule set forth in the Agreement.

                       (8) On October 24, 2006, the Company filed a Form 8-K regarding the completion of an acquisition on CWT Excursion.

                       (9) On November 6, 2006, the Company filed a Form 8-K regarding the completion of the disposal of 60% of our equity investment in New Generation through the sale of all of our shares of Rejoice Success Limited.

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Item 14 . Principal Accountant Fees and Services

Fees Billed For Audit and Non-Audit Services

The following table represents the aggregate fees billed for professional audit services rendered to accounting firm of Child, Van Wagoner & Bradshaw, PLLC, our current independent auditor, and all fees billed for other services rendered by Child, Van Wagoner & Bradshaw, PLLC during those periods.

Year Ended December 31	2006		2005
Audit Fees (1)		102,313		84,096
Audit-Related Fees () (2)		-		-
Tax Fees (3)		3,077		3,095
All Other Fees (4)		-		-
Total Accounting Fees and Services		105,390		87,191

⁽¹⁾ Audit Fees . These are fees for professional services for the audit of the Company's annual financial statements, and for the review of the financial statements included in the Company's filings on Form 10-QSB, and for services that are normally provided in connection with statutory and regulatory filings or engagements.

⁽²⁾ Audit-Related Fees . These are fees for the assurance and related services reasonably related to the performance of the audit or the review of the Company's financial statements.

⁽³⁾ Tax Fees . These are fees for professional services with respect to tax compliance, tax advice, and tax planning.

⁽⁴⁾ All Other Fees . These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax Fees.

Pre-Approval Policy For Audit and Non-Audit Services

The Company does not have a standing audit committee, and the full Board performs all functions of an audit committee, including the pre-approval of all audit and non-audit services before the Company engages an accountant. All of the services rendered to the Company by accounting firm of Child, Van Wagoner & Bradshaw PLLC after March 2006 were pre-approved by the Board of Directors of the Company.

The Company is presently working with its legal counsel to establish formal pre-approval policies and procedures for future engagements of the Company's accountants. The new policies and procedures will be detailed as to the particular service, will require that the Board or an audit committee thereof be informed of each service, and will prohibit the delegation of pre-approval responsibilities to management. It is currently anticipated that the Company's new policy will provide (i) for an annual pre-approval, by the Board or audit committee, of all audit, audit-related and non-audit services proposed to be rendered by the independent auditor for the fiscal year, as specifically described in the auditor's engagement letter, and (ii) that additional engagements of the auditor, which were not approved in the annual pre-approval process, and engagements that are anticipated to exceed previously approved thresholds, will be presented on a case-by-case basis, by the President or Controller, for pre-approval by the Board or audit committee, before management engages the auditors for any such purposes. The new policy and procedures may authorize the Board or audit committee to delegate, to one or more of its members, the authority to pre-approve certain permitted services, provided that the estimated fee for any such service does not exceed a specified dollar amount (to be determined). All pre-approvals shall be contingent on a finding, by the Board, audit committee, or delegate, as the case may be, that the provision of the proposed services is compatible with the maintenance of the auditor's independence in the conduct of its auditing functions. In no event shall any non-audit related service be approved that would result in the independent auditor no longer being considered independent under the applicable rules and regulations of the Securities and Exchange Commission.

84

INDEX TO EXHIBITS

The following exhibits are filed as part of this report:

Exhibit Number	Description
14.1	Code of Ethics, incorporated by reference from Exhibit 14.1 to our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.
31.1	Rule 13a-14(a)/15d-14(a) Certifications of Chi Ming Chan, CEO *
31.2	Rule 13a-14(a)/15d-14(a) Certifications of Man Ha, Principal Financial Officer *
32	Statement Required By 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of TheSarbanes-Oxley Act of 2002*.

* Filed herewith.

85

SIGNATURES

In accordance with the Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 16, 2007

	CHINA WORLD TRADE CORPORATION
By:	/s/ Chi Ming Chan
	Chi Ming Chan, Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Chi Ming Chan	Chief Executive Officer	April 16, 2007
Chi Ming Chan	Director
/s/ Man Ha	Chief Financial Officer	April 16, 2007
Man Ha

Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons in the capacities and on the date indicated.

Signature	Title	Date
/s/ William C.H. Tsang	Chairman and Director	April 16, 2007
William C.H. Tsang
/s/ Zeliang Chen	Vice Chairman and Director	April 16, 2007
Zeliang Chen
/s/ Chi Ming Chan	Chief Executive Officer	April 16, 2007
Chi Ming Chan	And Director
/s/ Chao Ming Luo	Director	April 16, 2007
Chao Ming Luo
/s/ Man Ha	Chief Financial Officer	April 16, 2007
Man Ha

86

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

I, Chi Ming Chan, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-KSB of China World Trade Corporation.

2. Based on my knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)* for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) *;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information (all of which do not apply); and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

* Indicates material omitted in accordance with SEC Release Nos. 33-8238 and 34-47986.

Date: April 16, 2007

/s/ Chi Ming Chan

Chi Ming Chan

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

I, Man Ha, Principal Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-KSB of China World Trade Corporation.

2. Based on my knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)* for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) *;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information (all of which do not apply); and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

* Indicates material omitted in accordance with SEC Release Nos. 33-8238 and 34-47986.

Date: April 16, 2007

/s/ Man Ha

Man Ha

Principal Financial Officer

EX-32

EXHIBIT 32

STATEMENT REQUIRED BY 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-KSB of China World Trade Corporation (the "Company") for the year ended December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Chi Ming Chan, Chief Executive Officer, and Man Ha, Principal Financial Officer of the Company, individually certify that:

* the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

* information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented.

/s/ Chi Ming Chan

Chi Ming Chan

Director and Chief Executive Officer

Dated: April 16, 2007

/s/ Man Ha

Man Ha

Principal Financial Officer

Dated: April 16, 2007

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to China Mobility Solutions, Inc. and will be retained by China Mobility Solutions, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.